Faraday Future Trying to Raise $1 Billion to Insulate Itself from LeEco's Woes

As its patron cuts back, Faraday Future looks for a new source of funding.

AP Photo/Jae C. Hong

As its main backer LeEco lays off U.S. staff in a bid to save money, Faraday Future is looking for a new source of funding.

The electric-car startup is trying to raise $1 billion in order to insulate itself from LeEco's financial woes, reports Bloomberg. Citing an anonymous source with knowledge of the matter, the news service said Faraday has begun meeting with potential investors. Faraday is reportedly targeting large-scale investors such as sovereign wealth funds, and hopes to complete the funding round in the next couple of months.

The source also said LeEco founder Jia Yueting would not put any more money into Faraday. Jia has reportedly sunk $300 million of his own money into the automaker. Jia disclosed late last year that LeEco was running short of cash, and early this week the Chinese tech company said it would eliminate 325 U.S. jobs, reducing its U.S. staff to just 50 people, according to Bloomberg.

Faraday has said it is unaffected by the LeEco job cuts, and that the tech company's financial troubles will not alter its own plans to build a new factory and start producing electric cars. In one interview, a spokesperson said LeEco's belt tightening might allow it to devote more resources to automotive projects.

But Faraday has had its share of trouble. The automaker unveiled its FF 91 electric car at CES back in January, but has made little progress on the factory in North Las Vegas, Nevada, that's supposed to build it. Construction at that site was halted for months after a dispute with lead contractor AECOM over payments. Faraday also cancelled plans for a second factory, in California.

Faraday previously said the Nevada factory would cost $1 billion, although it plans to invest that money in phases. The first phase will involve completing only a portion of the factory, so that Faraday can actually start producing cars. The rest will be completed over time. Faraday opened the bidding process for the next phase of construction in February.