Faraday Future in financial trouble? (Update)

UPDATE This rumor is upgraded to 'fact' today. The construction company employed by Faraday Future to build its billion-dollar megafactory in Nevada has confirmed that work on the complex has stopped.

The company, AECOM, released a statement to Jalopnik saying that construction of the factory has been halted and is scheduled to resume early next year.

“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."

Faraday Future itself has also confirmed that construction work has stopped.

Although no official reason has been given for the decision, just last week, the Chinese billionaire funding FF admitted that his company had run into money issues due to an over-extension of its global strategy.

In the meantime, the electric automaker startup is preparing to launch its first production model at CES 2017 in January.

10/21/16 A construction firm working on Faraday Future's $1 billion Nevada factory has warned the electric-car startup that it could face a work stoppage over millions of dollars in unpaid bills, raising questions about Faraday's financial condition reports David Undercoffler of autonews.

In an Oct. 10 letter, Robert Gay, vice president and project executive at AECOM — which is overseeing $500 million of work on the roughly $1 billion, 3 million-square-foot plant — cites an unpaid $21 million deposit, due in September, to an escrow account to cover material costs and subcontractor work. A copy of the letter was obtained by Automotive News.

The letter gives Faraday 10 days to “fully fund" the escrow account with the overdue September payment, or risk a suspension of work until “the funding issue is resolved."

The letter also listed projected payments due of about $25.3 million for October and $11.8 million for November.

"AECOM management views these deposits as a critical metric to project financial security and maintaining confidence and credibility with our project subcontractors and suppliers," the letter reads.

In response to queries about the letter, Faraday and AECOM emailed a joint statement to Automotive News reaffirming their commitment to working together.

"The business relationship between Faraday Future and AECOM is strong and we remain committed to building our factory of the future in North Las Vegas," the statement read. A Faraday spokesman said that no work stoppage would take place and that the automaker was working diligently with AECOM to resolve the overdue payment.

Faraday, which is backed primarily by Chinese tech billionaire Jia Yueting, began developing the site in July after a high-profile groundbreaking in April with Nevada state officials. Construction work has been largely confined to large-scale grading of the 900-acre site. Work on the foundation and building isn't expected to start for several months.

Faraday hopes to use the factory to build a range of fully electric vehicles for sale in the U.S. and China. Nevada lawmakers lured Faraday to the barren industrial site in North Las Vegas — about 30 miles northeast of downtown Las Vegas — with a $215 million incentive package approved in December 2015. David Undercoffler/autonews

Leave a Reply