Faraday Future Downsizes New Factory Plans, Reduces EV Lineup
【Summary】Concerns surrounding the factory surfaced after individuals noticed that construction has not started on the 703-acre plot of land.
Faraday Future (FF) is off to a very rocky start in its journey to dethrone Tesla as top US-based EV manufacturer. At CES 2017, the startup revealed its first production-ready vehicle to consumers. It also began taking reservations for the EV – even though the company didn't have the monetary resources, production capabilities or manpower to complete the orders. To reassure customers, FF promised the construction of a new three-million square feet facility in Nevada.
At the moment, this phase has not been completed. Concerns surrounding the factory surfaced after individuals noticed that construction has not started on the 703-acre plot of land. This time, instead of reassuring its customers about possible delays, FF revealed it slashed plans to build the massive factory, from three-million square feet to 650,000 square feet.
According to Reuters, the business has been in trouble since it launched. FF's financial woes have caught the attention of the media and its investors. In 2016, several key executives, including former CEO of Ferrari North America (2010 to 2014) Marco Mattiacci and former SVP of Product Marketing and Strategy at Volkswagen Joerg Sommer, left the company. The highly anticipated unveiling at CES 2017 was supposed to revive the company's reputation, which it did for a few weeks after the event, until analysts started picking apart its tainted reservation figures.
"You have a new company that has never built a car, building a new plant in the middle of the desert, financed by a mysterious Chinese billionaire. At some point, as with Bernie Madoff, the game ends," explained Nevada State Treasurer Dan Schwartz.
Fast forward to today, FF is at another crossroads. Its new, smaller factory, which has not been built yet, will only be capable of producing 10,000 cars per year (down from 100,000). The release date for the EVs won't be until 2019. Perhaps the most interesting aspect of these obstacles is all the help FF is getting to secure the construction project. Nevada officials offered an incentive package, filled with over $215 million in tax credits and abatements. FF has partnered with AECOM for the construction of the factory in a deal worth $6 million.
Less Cars, More Problems
The downsized factory isn't the only thing FF is cutting back on. It is also reportedly trimming its EV lineup from seven models to two. If the startup plans to take on Elon Musk's wildly successful EV company, i.e., Tesla, the business needs to be able to produce at least 10,000 units per quarter (in Q4 2016, Tesla produced 9,500 Model X cars). The only reassuring aspect of FF's current challenges is its new timeline for production, which will be completed in multiple stages.
"We expect planning, engineering, and construction of this Stage 1 Manufacturing Project to proceed rapidly so that we can bring our flagship vehicle, the FF 91, to production more quickly. At a later date, this Stage 1 Manufacturing Project will be integrated into the Stage 2 Manufacturing Project, which is scheduled to start construction later this year," said a FF spokesperson during an interview with Slash Gear.
Michael Cheng is a legal editor and technical writer with publications for Blackberry ISHN Magazine Houzz and Payment Week. He specializes in technology business and digesting hard data. Outside of work Michael likes to train for marathons spend time with his daughter and explore new places.
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