Faraday Future halts factory work, hopes to resume early 2017 (update)


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)

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)

Faraday Future's ambitious plans to launch a production electric car in less than two years appear to have hit a snag.

Before the Chinese-backed startup can begin production, it needs to complete a new factory in North Las Vegas, Nevada, which has a stated cost of $1 billion.

Last month, lead contractor AECOM warned Faraday that it was late on a $21 million deposit for an escrow account to cover material costs and subcontractor work.

DON'T MISS: Faraday Future imperils electric-car factory, misses payment to contractor

Now, work at the Nevada factory site has stopped completely, Reuters reports.

A Faraday spokesperson would not confirm that the company had missed any payments, but told the news service that Faraday is "working with" AECOM during an "adjustment period."

Work at the site will not resume until early 2017, the spokesperson said.

UPDATE: We first published this article on November 18. Ten days later, news broke that Nevada state treasurer Tim Schwartz—a long-time opponent of the subsidies and tax breaks granted to Faraday Future, as noted in the last link below—had given an interview to China Daily in which he suggested that Le Eco founder Jia Yueteng was running out of money. The Chinese entrepreneur vigorously contested that characterization and intimated that the comments were defamation. Jalopnik has more detail, with links.

Teaser for Faraday Future electric car debuting at 2017 Consumer Electronics Show

Teaser for Faraday Future electric car debuting at 2017 Consumer Electronics Show

It would seem to be hard for Faraday to swallow a delay of at least a month and a half as the proclaimed deadline for its electric-car launch draws nearer.

Faraday still plans to unveil its electric car at the Consumer Electronics Show—held in Las Vegas, not far from the factory site—in January, the spokesperson said.

The company broke ground on the factory in April, but reportedly only relatively limited grading work has been done so far.

ALSO SEE: Faraday Future backer LeEco is running out of cash, CEO admits

Faraday is backed by Chinese billionaire Jia Yueting, and has expected to rely on his LeEco tech empire for funding.

But in a recent letter to employees, Jia admitted that the company had overextended itself, and is now short on cash.

He said LeEco's automotive division has already spent 10 billion yuan ($1.475 billion).

Teaser for Faraday Future electric car debuting at 2017 Consumer Electronics Show

Teaser for Faraday Future electric car debuting at 2017 Consumer Electronics Show

Some of that money has likely gone to Faraday Future, but LeEco also has a separate partnership with Aston Martin, and has mulled building and selling electric cars under its own brand name as well.

It displayed an autonomous electric concept car called the LeSee at the 2016 Beijing Motor Show.

MORE: Faraday Future vs Nevada treasurer: electric cars vs taxpayer protection

The ability of LeEco to fund Faraday's manufacturing plans has already been questioned by the Nevada state government, which offered $200 million in incentives to land Faraday's factory.

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.

This latest episode seems unlikely to help that argument.

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