From right: Tom Wessner, VP of Global Supply Chain at Faraday Future (FF); Ding Lei, Co-founder, Global Vice Chairman at SEE Plan at LeEco; Nevada Gov. Brian Sandoval; and Dag Reckhorn, VP of Global Manufacturing at FF turn shovels at Faraday Future's Ground Breaking Ceremony on Wednesday, April 13, 2016, in North Las Vegas.(Bizuayehu Tesfaye/AP Images for Faraday Future)Enlarge Photo
Self-made millionaires often possess an innate belief that they can create products and companies where none existed before.
But with companies come factories, and with factories come tax breaks, and with tax breaks come inconvenient questions from government officials.
Which is how Faraday Future finds its first U.S. factory delayed by Dan Schwartz, state treasurer of Nevada.
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As Bloomberg reports (via the Chicago Tribune), the company plans to start building electric cars and the batteries that power them at a $1 billion plant in North Las Vegas it announced last December.
The car itself hasn't been unveiled as yet, but that's not what has worried Schwartz for several months now.
His concern, on behalf of Nevada's taxpayers, is that founder Jia Yueting's holdings in Leshi Internet Information & Technology Company are largely pledged to back loans to build the plant.
Faraday Future FFZERO1 Concept, unveiled at 2016 Consumer Electronics Show, Las VegasEnlarge Photo
Trading in the stock on the Shenzhen market was halted after steep declines on December 7. Since it resumed on June 3, the value of the stock has fallen 11 percent.
If it were to fall further, Yueting's holidings might not be worth enough to cover the loan—imperiling the plant.
Schwartz wants more transparency on the funding before he will sign off on a state contribution of $120 million for the necessary roads, power lines, and water mains to supply the plant.
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In March, Faraday put up a $75 million bond, and set aside $13 million in an escrow account, in an attempt to reassure the state that it could meet its financial obligations.
Faraday said late last year it plans to start production of electric cars "within two years," which would be before the end of next year.
At a flashy debut event held in January at the Consumer Electronics Show, the company showed a striking concept car called the FFZERO1, along with computer renderings of a platform it said would underpin future vehicles.
wireframe of possible Faraday Future production vehicle, from company promotional video at CES 2016Enlarge Photo
There remains little indication of what the first production model from Faraday Future will be.
A feature published in March by Britain's The Guardian newspaper quoted "a former Faraday Future executive" as saying that the company’s first car would be "no Tesla killer."
He added that the vehicle will be “much heavier, longer and bulkier than a Tesla, but really sculpted and beautiful.” The price will start at more than $150,000, the report said.
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Meanwhile, Faraday Future spokeswoman Stacy Morris told Bloomberg the company could "technically" build the plant without the state's contributions.
Schwartz has said he will only support the sale of debt to back the state's contributions to the project if Jia and the company explain more clearly how they will ensure a stable source of funding, regardless of what happens to the value of the billionaire's holdings.
Negotiations are continuing.