The honeymoon is over before it even began. The State of Nevada is ending its relationship with automaker Faraday Future, which once promised to build a vast and glorious manufacturing facility within its borders — in exchange for tax incentives.
Eschewing construction of its $1 billion promise in North Las Vegas due to financial woes, Faraday was insistent that it was going to begin construction on a smaller assembly plant before tackling the rest of the build site. According to the company, a bijou factory was to be the first phase of a multi-stage approach intended to bring the FF 91 swiftly to market.
In July, Faraday Future announced it would be placing that project on hold as well, but remained committed to using the Nevada site for long-term vehicle manufacturing. Until then, it said it would shift its 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.” If anyone knows what that gibberish means, we’d love to know. It’s been several months and we still can’t decipher that sentence into useful information.
Apparently, Nevada wasn’t interested in waiting to see how Faraday progressed through its new identity or if “user-ship personal mobility” leadership has anything to do with building cars. According to The Nevada Independent, the startup sent a letter to the Governor’s Office of Economic Development which indicated it was giving up its status as a “qualified project.” Steve Hill, executive director of the GOED, indicated that Faraday had voluntarily abandoned its eligibility for a state tax abatement and infrastructure building package and issued a check for $16,200 — thus returning all the incentive money that it had received from the state.
Obviously, the state was happy to accept the terms of surrender.
“The Faraday project is basically dissolved at this point at absolutely no cost to the state and local governments,” said Hill.
About $620,000 of taxpayer money is just chilling in a trust fund with nowhere specific to go since the company was unable to uphold its end of the bargain. That money is likely to be routed into various state entities, says the Governor’s Office.
Congratulations are in order to Nevada State Treasurer Dan Schwartz, who as among the very first people to cry foul of his state’s arrangement with the aspiring automaker. He demanded that the GOED conduct an audit of Faraday earlier this year, which it agreed to. That investigation was scheduled to conclude sometime before autumn and may have had something to do with FF’s voluntary withdrawal.
While other outlets may indicate that this may not be the end for Faraday Future, we were willing to pronounce them dead months ago. Whatever it is we are witnessing now amounts to posthumous spasms.
Faraday may have finally secured a manufacturing plant in Hanford, California, and received some important fund-raising capital this summer, but the deck is stacked against it. The brand’s hype-driven existence didn’t mesh particularly well with how the business was actually ran.
The media has frequently outlined the company’s weird corporate connections to China’s LeEco, despite both firms repeated denial that founder Jia Yueting was anything more than a serious investor. However, earlier this week, FF employees confessed to The Verge that they had been designing vehicles for LeEco all along — making the partnerships’ repudiations all the more bewildering.
This Chinese connection has been a major thorn in Faraday’s side. Severe financial mismanagement has forced Jia to abandon projects and sell off assets to keep his core businesses afloat. He has even reduced his stake in LeEco to help support operations of the internet company. He now appears to have stopped funneling personal money into the business and rumors are stirring that he doesn’t even have enough left to pay off his own debts, let alone the debts of his many side projects.
Faraday looks to be left on its own, which is sad because they did provide an interesting prototype. But nobody is going to trust them to deliver on their car commitments when they’ve broken so many promises already. Besides, the amount of money it would take to make good on any one of them would be astronomical.
To quote Stephen King’s Pet Cemetery, “Sometimes, dead is better.”
[Image: Faraday Future]