Faraday Future Hits Possible Roadblock In Nevada

FEB 25 2016 BY ERIC LOVEDAY 26

Faraday Future FFZERO1

Faraday Future FFZERO1

Faraday Future

Faraday Future

Automotive News is reporting that there’s a potential money-related issue with Faraday Future and its plans to construct a factory in Nevada.

The state previously approved Faraday for up to $215 million in incentives and credits, but now state officials are wondering if Faraday is even capable of financing any of the factory’s construction on its own

Automotive News reports:

“Faraday, which dazzled Las Vegas at this year’s Consumer Electronics Show with its FFZERO1 Concept and talk of a broad lineup of EVs in coming years, has promised to invest $1 billion over the next 10 years in a factory that would ultimately employ as many as 4,500 people. The company has started clearing land at the North Las Vegas site and expects to break ground in April.”

“But now Nevada is tapping the brakes on some of the subsidies until Faraday can prove that it has some cash of its own. The state is requiring Faraday to put up as much as $75 million as collateral before Nevada begins to issue bonds for infrastructure projects it has pledged around the 3-million-square-foot site.”

Make sense to us. The state really shouldn’t fund an automaker if the company has no ability to stand on its own two feet.

Automotive News adds this quote from Nevada treasurer Dan Schwartz:

“My responsibility is to the Nevada taxpayer. I’m personally and the office is very much in favor of economic development, but what we don’t want to happen is to issue bonds that won’t be paid.”

It seems the funding issue is tied to Jia Yueting, chairman and founder of Leshi Internet Information & Technology Co., (aka LeTV).  As Automotive News reports:

“Schwartz, a former banker who lived in Hong Kong on and off for 12 years, says he began to worry about Faraday’s finances after trading was halted in shares of Jia’s online video company, Leshi Internet Information & Technology Corp., on China’s Shenzhen market in early December, pending what it called an internal reorganization. Trading was to resume on Jan. 31, but that date has been pushed back to March 7.”

Schwartz now seems to doubt whether Leshi can actually fund Faraday’s grand plans.

Automotive News reached out to Faraday for comment on the situation. Faraday responded:

“It is our policy not to discuss our funding.”

Schwartz met with several of Faraday’s execs recently. Those execs assured him that Faraday is financially sound. They’ll all meet up again after Leshi shares resume trading on March 7.

Source: Automotive News

Categories: Faraday Future

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26 Comments on "Faraday Future Hits Possible Roadblock In Nevada"

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solyndra?

More like, “Bernie Madoff”. 😉

ffbj
January 12, 2016 at 12:09 pm
I sort of wonder if Faraday even has a Future.

Not to beat a dead horse:

ffbj
December 31, 2015 at 1:35 pm
Possible negative headline reactions.

Frankly, Faraday, I don’t give a damn!
Faraday hits it foul with new concept.
FF not as fabulous as forecast.

Faraday Future???If everything we’re reading contains any truth….It doesn’t look good.However..,I truely hope that somehow they succeed…

Confirms my suspicions about this company–all hat and no cattle.

Tesla bought their factory from Toyota at a very low price, that gave them and advantage.

Tesla bought the building at just the right time, during an economic downturn, to get a very good price. But what they bought was an empty building. It’s not like the building was a fully equipped auto assembly plant. I suppose it had things like plumbing, bathrooms and kitchens, so yes that would have saved some money on construction.

But the expensive part of building an auto assembly plant is buying and installing all the machinery needed to operate assembly lines, plus hiring and training workers. Tesla still had to come up with all the money needed for that. Of course, the Dept. of Energy loan helped a lot with that. But let’s not forget that Tesla managed to make its first car, the Roadster, without any such large assembly plant.

Tesla showed it had the ability to make and sell something real before it got that government-backed loan. Faraway Faraday future hasn’t demonstrated anything remotely like that. Their “batmobile” so-called concept car, which probably can’t even move under its own power, is rather, um… far away from that!

A one million square foot factory that used to build cars will cost a LOT more that what Tesla paid, empty of not. That is an advantage.

Tesla also had a separate transaction to buy a portion of the tooling in NUMMI for pennies on the dollar.

For example, the paint shop Tesla just retired was existing at NUMMI before Model S started production.

Yes. Tesla lucked out. They got the NUMMI factory from GM and Toyota in the midst of an economic meltdown for an extremely low price.

Of course Toyota made out on the deal since they got themselves Tesla stock that appreciated heavily.

LinkedIn claims that this company is up to 500 employees. If that’s true, that’s $100M in payroll a year. Are they still being paid? I would assume so. If that’s true, they *should* have no problem coming up with $75M.

But are they actually paying all those people actual salaries? Or are most of them just being paid a retainer in return for FF posting their names on their website?

FF didn’t need 500 actual working employees to put together that ridiculous “batmobile” mock-up, that’s for sure.

According to LinkedIn, 73 employees listed Tesla as a former employer. Are they all being paid retainers to sit at home rather than collect hefty salary and stock at Tesla or Apple?

“didn’t need 500 actual working employees to put together that ridiculous “batmobile” mock-up, that’s for sure.”

You need to understand the VPA architecture, not the pretty concept painting (body):

If FF makes it financially is another question.

The concept car was so wacky, and their presentation was a disaster. I wrote them off the day of the FFZero rollout, especially when they started taking about “content creation”. Glad to see they are catching these guys before they pour the state’s millions in the toilet.

This smelled to me from the start, because the numbers being thrown around for funding showed FF didn’t have sufficient backing to even build or equip a small auto assembly plant. Funding for automobile startups is measured in billions of dollars, not mere tens of millions.

A website containing nothing but an architect’s artist concept for an unrealistic looking factory and a list of ex-Tesla executives, with a suspiciously high number of “Vice Presidents” on the list, were red flags to me. My question is: Why weren’t they to Nevada treasurer Dan Schwartz?

Anyway, I’m glad that Nevada officials have started taking a skeptical view of this vaporware company before they’ve actually spent many taxpayer dollars supporting a project which probably never will get off the ground.

“All hat and no cattle”. Yeah, I think you hit the nail on the head there, MikeG.

I’m having a hard time taking this operation seriously from what I’ve learned so far.

The EV business has been filled with dreamers and snake oil salesman. The dreamers are over optimistic. The snake oil salesmen know that a lot of people really want to buy cars that don’t burn oil. But it is EXTREMELY difficult to build a desirable affordable EV. So there have been a LOT of aborted companies, bankruptcies, and scams in the EV space.

So a good amount of skepticism is healthy to have.

Who changed the subject to Tesla?

You?

Tesla is the counter example. 🙂

looks like it has a tow hook in the front of it.

No, no.
Look more closely. That’s the wind-up key.

It is too bad really; as EM says “…the more the merrier…” when it comes to EVs in the marketplace.

I am really hesitating to submit my resume to this company after reading this article and lots of talk backs