Faraday Future Scraps Plans for Billion-Dollar Factory

The site Faraday Future's indefinitely postponed $1-billion manufacturing in North Las Vegas. (Image courtesy of Faraday Future.)

No one ever said making cars was easy.

Elon Musk has been at it for years, and he’s still struggling to meet his deadlines. The first Model 3 may have rolled off the line last week, but that’s a far cry from Tesla’s production goal of 500,000 cars per year by 2018.

Nevertheless, Tesla’s situation is not looking nearly as grim as that of Faraday Future, another upstart automaker that made a splash at last year’s CES with its electric supercar.

Initially, the company had plans to invest $1 billion USD in building a 3-million-sq-ft facility at Apex Industrial Park in North Las Vegas, breaking ground in April 2016. Now, the company has issued a statement saying that it will be putting a hold on the Apex facility.

From left to right: Tom Wessner, VP of global supply chain at Faraday Future (FF), Ding Lei, co-founder, global vice chairman at SEE Plan at LeEco, Nevada Gov. Brian Sandoval and Dag Reckhorn, VP of global manufacturing at FF turn shovels at Faraday Future’s Ground Breaking Ceremony on Wednesday, April 13, 2016, in North Las Vegas. (Image courtesy of Bizuayehu Tesfaye/Faraday Future.)

“We at Faraday Future are significantly shifting our business strategy to position the company as the leader in user-ship personal mobility—a vehicle usage model that reimagines the way users access mobility,” reads a statement from the company. “As a result of this shift in direction, 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.”

According to a report by Business Insider, the company’s shift in strategy is due to the financial hardships currently confronting its owner, Jia Yeuting. A Chinese court has frozen $180 million of his assets along with an additional $2.3 billion of shares in his publicly traded company, Leshi Internet Information & Technology, due to unpaid loans.

Nevada State Treasurer Dan Schwartz issued a scathing response to the announcement:

“We all make mistakes, but this one was obvious. Long after it became apparent that ‘a mysterious Chinese billionaire’ and Faraday Future could never build a $1 billion electric auto plant, Nevada state officials continued to insist that Faraday Future would magically create 4,500 jobs in North Las Vegas. Now, Jia Yuteng, Faraday’s funding source, has had his assets frozen by a Shanghai court and is under increasing scrutiny in China for what amounts to fraud; the automobile plant is just a pile of sand in the APEX Industrial Park; and the promised jobs are yet another mirage in the Southern Nevada desert."

Schwartz continued, "The only good news is that the Treasurer’s Office continued to press for financial information from Faraday and refused to issue the $175 million bond without detailed information... Welcome to Nevada, where good government takes a back seat to bad deals.”

Concept image of the Faraday Future manufacturing facility. (Image courtesy of Faraday Future.)

Although Faraday Future has denied that any layoffs are planned in the near term, it’s difficult to imagine where the company can go from here. Setting up shop in an existing manufacturing facility makes sense if you’re trying to attract investors, but finding such a facility is no easy task, especially given the company’s avowed preference for locating in Nevada or California.

That being said, the former GM Wilmington Assembly plant looks to be available, after another auto start up, Fisker Automotive, made an unsuccessful attempt to repurpose it in 2012. Delaware might not be Faraday Future’s first choice for a manufacturing location, but it would be heartening to see the last auto manufacturing plant in the state brought back to life.

For more information, visit the Faraday Future website.