Faraday scraps plans for Nevada plant

Electric vehicle startup Faraday Future has halted plans to build a $1 billion factory in Nevada amid money troubles plaguing one of its biggest backers.

The plant in North Las Vegas was due to produce Faraday's first car, the FF 91 flagship electric crossover-hatchback. The FF 91 is a 1,050-horsepower supercar that can accelerate to 60 mph in 2.39 seconds. If it eventually reaches production, it could cost as much as $200,000.

Faraday CFO Stefan Krause said the decision announced on Monday to scrap the plant was due to a shift in business strategy. The Gardena, California-based company said in a statement that it will now look for an existing facility to produce its electric vehicles in California or Nevada.

"We at Faraday Future are significantly shifting our business strategy to position the company as the leader in user-ship personal mobility — a vehicle usage model that reimagines the way users access mobility," the company said in a statement.

"As a result of this shift in direction, we are in the process of identifying a manufacturing facility that presents a faster path to start-of-production and aligns with future strategic options."

Faraday said "we remain committed to the buildout of the APEX site for long-term vehicle manufacturing and firmly believe North Las Vegas is an ideal place for us to be."

Faraday's announcement came days after reports that a Shanghai court froze more than $180-million in assets belonging to one of the company's biggest backers, tech billionaire Jia Yueting. The company said that Jia's financial problems were not related to the decision.

Jia stepped down last week from the helm of the publicly traded arm of LeEco, the Beijing-based conglomerate he founded over a decade ago. At the same time, he reaffirmed his commitment to Faraday.

Thousands of jobs had been anticipated with the construction and launch of the proposed plant on a 900-acre site at the Apex Industrial Park in North Las Vegas.

The company spent at least $120 million developing the site in expectation that it could begin turning out cars there next year. But construction of the plant had yet to begin when the company made its Monday announcement.

Governor Brian Sandoval and Nevada lawmakers approved $215 million in tax breaks and $120 million in infrastructure improvements for the project in 2015.

Steve Hill, the director of the Governor's Office of Economic Development, said in a statement: "Throughout the process of working with Faraday, the state recognized both the opportunity a large manufacturing facility could provide as well as the inherent risk associated with a start-up company attempting this endeavor."

Hill said the state had pledged $335 million in incentives to the company, but had not yet spent any taxpayer money on the project.

He said the state, recognizing both the opportunity and risk of the endeavor, required the company to invest at least $1 billion before it received the tax breaks and infrastructure improvements approved by state lawmakers in 2015.

Faraday halted work on the project outside Las Vegas last November, at the time calling the stoppage a "temporary adjustment" that wouldn't affect plans to begin production in 2018. It sunk more than $120 million into the project.