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Faraday Future drops US factory plan

China Daily USA | Updated: 2017-07-12 09:56

Electric-car maker shelves site in Nevada, to look for another facility

Last year, Nevada Treasurer Dan Schwartz questioned plans by LeEco founder Jia Yueting to build a $1 billion, 1 million-square-foot electric-car plant there. He called the billionaire's strategy of borrowing to finance many new businesses so quickly unsustainable.

"This is all Fantasyland," he said at the time. "The best analogy is the Emperor's New Clothes. There's nothing there."

And in an interview with China Daily in November 2016, Schwartz said: "It's clear Mr Jia doesn't have any money."

On Monday, Faraday Future halted plans to build the Nevada factory for its 1,050-horsepower FF 91, which Faraday earlier this year claimed would be the world's fastest electric car, beating Tesla Inc.'s Model S sedan. Its expected sticker price was $200,000.

"We are in the process of identifying a manufacturing facility that presents a faster path to start-of-production and aligns with future strategic options," Faraday said in a statement on Monday.

The announcement came one week after a Shanghai court froze $182 million in assets belonging to Jia because he failed to pay interest due on bank loans taken out to fund his smartphone business.

Faraday had dismissed suggestions that its operations might be affected by the troubles at LeEco. Jia personally invested $300 million in Faraday and was to lead the company as chairman.

Business Insider reported on Monday that it has learned that the company also is significantly pulling back on operations at its Los Angeles-area headquarters amid a deepening cash crunch.

"We are in a precarious situation right now," Business Insider quoted what it said was a senior-level Faraday employee. "The generous funding we had in the past is no longer here."

Faraday said that it would keep all rights to its site in North Las Vegas and still planned to build a vehicle production facility there in the long term.

Qiong Liu, North Las Vegas city manager, told Reuters that the company will build a 60,390-square-meter plant beginning later this year.

Thousands of jobs had been anticipated with the construction and launch of the plant on a 900-acre site at the Apex Industrial Park in North Las Vegas.

The state had pledged $335 million in incentives to the company, but had not yet spent any taxpayer money on the project, according to Steve Hill, director of the Governor's Office of Economic Development.

Hill said the state, recognizing both the opportunity and risk of the endeavor, required the company to invest at least $1 billion before it received the tax breaks and infrastructure improvements approved by state lawmakers in 2015.

China Daily

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