Faraday Future Halts Work on Nevada Factory
Faraday will seek an alternate manufacturing facility for its FF 91 electric car.
Faraday Future has stopped construction work on its factory in North Las Vegas, Nevada. The Chinese-backed startup promised to invest $1 billion in the factory, but will now seek an alternative manufacturing facility for its FF 91 electric car.
"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 to Bloomberg. In a separate statement, Faraday said it will retain rights to the Nevada site, and still plans to build a factory there—at some point.
Faraday had planned to get the FF 91 into production by 2018, but the change in plans casts doubt on the company's ability to meet that goal. Also unclear is how Faraday will deal with the Nevada government, which agreed to a package of tax breaks and other financial incentives with the understanding that Faraday would invest a minimum of $1 billion in the North Las Vegas plant.
"The state recognized both the opportunity a large manufacturing facility could provide as well as the inherent risk associated with a startup company attempting this endeavor," the Nevada governor's office said in a statement. "The agreement with Faraday held Nevada's citizens harmless from the risk associated with this project."
The Nevada factory has been wrapped in controversy almost since its groundbreaking last spring. Work at the site stopped in November, following a dispute with lead contractor AECOM over payments. Faraday subsequently scaled back its plans, downsizing the factory in order to cut costs and get the job completed faster.
Faraday has survived largely thanks to financial backing from Chinese billionaire Jia Yueting and his LeEco tech company. But last November, Jia admitted that LeEco was running low on cash. Its financial problems have only gotten worse since then, with a Chinese court recently freezing billions of dollars in assets.
Jia stepped down as CEO of LeEco parent Leshi, and reportedly plans to focus on LeEco's automotive unit and Faraday Future. In a post on WeChat, Jia said Faraday is moving the location of its plant "to ensure on-time delivery of our product."
It is unclear where Faraday will decide to locate its factory, or how long it will take to get said factory up and running. Earlier this year, Faraday studied a second factory site in Vallejo, California, at the former Mare Island naval shipyard. But it later opted out of that site.