Faraday Future Halts Construction Of Multi-Purpose Factory
Financial issues finally creeping up on once-ambitious auto startupby Kirby, on
Faraday Future is still scheduled to debut its first production vehicle at the Consumer Electronics Show in January at Las Vegas. That’s the good news. The bad news is that production of the company’s billion-dollar mega-factory in Nevada has stopped. Even worse yet, that development could be a sign of things to come for the Chinese-backed electric car maker.
Jalopnik was the first to receive word of the work stoppage in the facility with AECOM, the construction firm tasked with building the whole thing, later confirming that Faraday Future has temporarily adjusted the construction timetable “with plans to resume in early 2017.” Now, this could just be a minor hiccup as Faraday continues to find its own footing in the industry, or it could be a case of the company biting off more than it can chew and is now having to pay the consequences for it.
To make things more problematic for Faraday, separate reports indicate that the company is already behind in payments to AECOM, amounting to around $21 million. And, the man behind the finances of the company, Chinese tech billionaire Jia Yueting, has also admitted that his initial plan of funding the company came at the expense of neglecting his other businesses, specifically Leshi, a Chinese version of Netflix that was largely responsible for making Jia his billions in the first place. Not surprisingly, Leshi’s stock has dropped precipitously since Jia’s memo, putting the company in an even trickier bind.
The overambitious goal of developing and building electric cars may have finally caught up with Jia and Faraday Future. The automaker said all the right things in response to the report, even doubling down on its goal to reveal its first production model at CES. But, this is definitely troubling times for the company and if history has taught us anything about automotive startups, the road to becoming functional, let alone successful, is far trickier than any of them could imagine.
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Faraday Future is facing an important year ahead
You can make all the promise you want, but if you don’t have the capacity to see through those promises, then that’s when you know you’re in a lot of trouble. Let’s be clear: Faraday Future is teetering close to falling into the same pit that has swallowed past auto startups that dreamt big before ultimately falling on their own swords.
I don’t want Faraday Future to suffer a similar fate because I want startups to succeed. Their ambitions are a big reason why the auto industry remains as vibrant today as it was back then. That said, it’s not enough to have ambition in the industry, especially if you’re a startup who’s looking to make serious waves. The first and most important to have is money, which apparently it doesn’t have now or didn’t have in the first place. If finances become a problem, that’s when you start wondering about the viability of a company.
That’s where Faraday Future is at right now, and between the debts, the mass defections, and the overambitious promises, the electric car company needs to get its eggs in order before it can even think about making any big decisions that will undoubtedly affect the company’s status.
Only time will tell if the construction of the massive mega factory continues, but from the way things look right now, I wouldn’t be surprised by whatever scenario arises from this issue. Good or bad, Faraday Future has gotten the taste of what business at this level is like. If you don’t have the resources to spend, spend, and spend, better stay on the sidelines and let the big boys play.
Read our full review on the 2016 Faraday Future FFZERO1 Concept here.