Faraday Future Partner LeEco Facing Major Cash Crunch
The company is down, but not out.
Update: LeEco contacted The Drive to report that the blog post is still up, but has been moved due to a site redesign, and clarified that LeEco is a sister company of Leshi.
Mass-producing an electric supercar is no easy feat, but it's even harder when you're short on cash. That's the position that LeEco CEO Jia Yueting is facing, as his company's stock declined steeply last week and sales of its shares were halted on the Shenzhen stock exchange.
LeEco is just one of several companies that operate as part of the Leshi Internet Information and Technology Corporation. The conglomerate also owns a video streaming service and manufactures a range of electronics and smartphones, which Yueting says is responsible for the operation's financial shortfalls.
This weekend, the business tycoon spoke at a business summit in Beijing, and assured investors that the company could recover from its financial setbacks. He recently secured $600 million to support the technology and automotive businesses last month, and is still planning on unveil a vehicle designed with partner Faraday Future at the 2017 Consumer Electronics Show early next year, according to an article in South China Morning Post.
Yueting said that next month the company will announce significant progress on the automotive manufacturing facility it will build in Deqing County in eastern China’s Zhejiang province, the article stated. The industrial park will be used to demonstrate the company's ability to leverage its Internet and manufacturing expertise to develop electric vehicles, advanced diving systems, and battery management and charging technologies.
Critics have been skeptical of Yueting's ability to pull everything off, as even the embattled CEO has admitted the company has expanded too rapidly. In addition to acquiring television maker Vizio for $2 billion earlier this year, the company completed a $250 million purchase of 49 acres in Santa Clara, California, to create an "EcoCity" that will house up to 12,000 employees. Yueting outlined his vision in a blog post, descrobomh a campus that's open to the community where people, media, and services are seamlessly connected between devices and locations and people can experience the "Eco Lifestyle."
The company currently employs 500 people in the U.S. and is still growing, he wrote, but it's not clear when the this ambition plan will be realized. The blog post has since been removed from LeEco's web site.
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