Electric vehicle startup Faraday Future has been having some significant setbacks recently and now confirmed that it stopped construction at its EV factory in North Las Vegas. While its future looks bleaker than a few weeks ago, we shouldn’t count them out too soon since it just secured more financing.
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The troubles started last week when Jia Yueting, CEO and Chairman of LeEco (FF’s main investor), announced to his employees that his company was short on cash and it would need to adjust its growth in order to keep things going.
Yueting invested $300 million personally in FF and his backing was essential for the company securing the incentive plan for the factory in Nevada. The company has other investors, but it looks clear that Yueting is the main financier. Not unlike Elon Musk with Tesla during the early years of the automaker.
Yesterday, LeEco and Yueting’s cash issues trickled down to FF. The company issued a joint statement with AECOM, the contractor building the North Las Vegas factory, announcing that construction is delayed to “early 2017”:
Faraday Future commenced work on its $1-billion state-of-the-art manufacturing facility in North Las Vegas earlier this year. To date, we have completed grading and foundation prep work.
At this time, Faraday Future is temporarily adjusting their construction schedule with plans to resume in early 2017. We remain fully committed to our client and our employees working on this project, and we look forward to the facility’s successful delivery.
People have been calling this the end of Faraday Future, but it looks like that would be premature.
Today, LeEco a $600 million financing round (via Reuters):
“In a statement sent to Reuters, Leshi [LeEco] said the fund commitments came from more than 10 Chinese companies. An initial tranche of $300 million would be delivered by the end of the month and be invested in the auto business and LeEco Global, it said.”
Faraday Future is LeEco’s main automotive business and the technology supplier behind its LeSee, the Chinese automotive brand of the company.
The money should be enough to keep LeEco and Faraday Future going for a while, but the news of the financial troubles could have a deeper impact on Faraday Future.
As we often reported in the past, FF has been able to attract an impressive talent base over the past 2 years and undoubtedly, part of their success in attracting top talent was the promise that they have the financial backing to bring their products to market.
While it seems that the financial backing is still there, it’s starting to look less significant than previously believed and it could encourage people to start looking somewhere else. I am sure recruiters at Tesla, Lucid Motors, Apple, Google, and automakers with operations in California are looking into making some moves right about now.
Some of our reporting on FF’s top hires to make it easier for those recruiters:
- Faraday Future is working on a maps engine for self-driving cars, hires top maps expert from Apple
- Faraday Future adds top VW executive to bring to market its upcoming electric vehicles
- Tesla loses ‘Head of Data Science’ to upstart competitor Faraday Future [updated]
- Apple Project Titan loses self-driving and computer vision expert to Faraday Future
- Faraday Future hires GM’s top electric propulsion expert and former EV1 Chief Engineer
- Faraday Future hires Toyota’s Studio Chief Designer to lead exterior design at the EV startup
- Faraday Future hires Tesla exec to manage its $1 billion EV factory in Nevada
- Faraday Future hired Bosch’s automated driving director to lead its own self-driving effort