Company startups are, by their nature, secretive and turbulent places. Toss in a Chinese billionaire or two, a new business model for selling transportation services rather than cars, and the brutal competition in the global auto industry, and you have the recipe for frequent and disruptive change. And, more often than not (as history shows us), failure.
The highly anticipated press event held by electric-car startup Faraday Future at January’s Consumer Electronics Show left more questions than answers in its wake. The company unveiled not an actual production car, but a concept for an all-electric high-performance supercar it might never build. It said almost nothing about what it planned to build, nor did it discuss its new business model. It didn’t even display the actual electric-vehicle chassis architecture it said it had designed–it only showed computer renderings of it.
Now, despite a press release from the company saying that it has been granted its first U.S. patent–for a power inverter to be known as the FF Echelon Converter–it appears to be a period of internal disruption and change. A lengthy feature last week in The Guardian newspaper, from Britain, reported that “a former Faraday Future executive told the Guardian that the company’s first car will be ‘no Tesla killer’.”
It will be, he said, “much heavier, longer and bulkier than a Tesla, but really sculpted and beautiful.” It is expected to be priced at more than $150,000. The report also noted that the company’s lead battery engineer, Porter Harris, resigned in January–apparently a huge loss for a company formed less than two years earlier.
Moreover, trading in shares of LeTV–widely known as the “Netflix of China,” and one source of billionaire backer Jia Yueting’s wealth–was suspended on December 7. It has not yet resumed.
All of this has made the State of Nevada nervous about the large tax breaks and other incentives it approved for Faraday to build what it said would be a $1 billion battery plant and assembly facility in Las Vegas. State treasurer Dan Schwartz journeyed to China on vacation during the Lunar New Year with his wife, who is a Chinese national.
As recounted in industry trade journal Automotive News, his visit left him with “doubts” about the company’s ability to finance Faraday’s ambitious plans. Shares in Leshi TV are set to resume trading on Monday, March 7.
Schwartz said he plans to meet with the company again next week.
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