Date
24 July 2017
Journalists gather around a Faraday Future vehicle in Las Vegas. The start-up company says its operations are overextended. Photo: Reuters
Journalists gather around a Faraday Future vehicle in Las Vegas. The start-up company says its operations are overextended. Photo: Reuters

China-backed Faraday Future scales back US plans

Electric luxury car start-up Faraday Future, one of several Chinese-funded companies taking aim at Elon Musk’s Tesla Inc., is throttling back on plans to build vehicles in the United States, Reuters reports.

Faraday, an affiliate of Beijing-based Leshi Internet Information and Technology Corp., has also pared its planned product portfolio down from seven to two vehicles, according to two sources with direct knowledge of the company’s plans.

Faraday will build a much smaller auto assembly facility than originally planned in North Las Vegas, Nevada, a city official said late on Tuesday.

North Las Vegas city manager Qiong Liu said Faraday told the city it will build a 650,000-square-foot (60,390-square-meter) facility, beginning later this year, on the site of a plant originally planned to take up three million square feet.

The downsizing follows an acknowledgment last fall by the company’s founder, Chinese tech entrepreneur Jia Yueting, that his global operations were overextended. Former Faraday executives have said the company struggled with cash flow issues almost from its inception.

At least a dozen key US executives have departed Faraday in the last nine months, according to the company and several of those executives.

In a statement, Faraday said it still plans to eventually construct the larger plant but gave no timetable.

Faraday is still hiring contractors to begin building the factory shell, according to a source familiar with the plans, but there is no firm date for completion.

“We remain committed to the State of Nevada and are continuing our US$1 billion investment in the region over the next few years,” Faraday said in the statement.

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