It would be easy to look at financially troubled Faraday Future and think that the inmates were running the asylum. Does a new announcement about the electric car start-up's manufacturing plans help or hurt matters?
Faraday has been making people go "hmm" for well over a year. The company broke ground on a massive, $1 billion facility outside Las Vegas in April 2016, bragging that new cars would roll off the assembly lines within two years. Soon afterward, however, the company's vice president for global manufacturing, Dag Reckhorn, tried to rein in expectations, saying that Faraday wanted to do things right, not just fast.
That seemed fair and sensible. However, two months later, it appeared that the word "sensible" had been removed from Faraday's dictionary: construction in Nevada hadn't begun, but Faraday was already thinking about building a second plant in California.
Bad news and more bad news followed Faraday throughout the fall, winter, and spring:
- Work was suspended at the Nevada site after Faraday failed to pay its bills;
- At CES, Chinese entrepreneur and Faraday founder Jia Yueting showed off a prototype of Faraday's FF91 electric car that wasn't just deeply underwhelming, but also failed to perform onstage;
- Insiders reported that Faraday was teetering on the brink of collapse, due largely to Yueting's financial mismanagement;
- Faraday finally sobered up and announced that it was dramatically scaling back plans for Nevada and would shift most of its production to China;
- The Chinese government froze billions in assets owned by Yueting, his wife, and Yueting's other properties--assets that Yueting needed to keep money flowing to Faraday; and then,
- Faraday said that construction in Nevada was being postponed indefinitely.
Did we mention that neither Faraday nor Yueting have any track record in building cars? If their story were a screenplay, it would read like this:
Faraday: "We are totally radical, and we are going to show America how awesome we are with our super neat cars!" (Cut to nighttime party montage on the Las Vegas strip)
Nevada: (Next morning as a hotel maid yanks open the curtains, revealing the noonday sun) "You must pay the rent."
Faraday: "We can't pay the rent!" (Calls China from a pay phone)
China: "You must pay the rent."
Faraday: "We can't pay the rent!" (Shrugs. Cue Incredible Hulk walking-away music as Jia Yueting hitchhikes along the desert highway, where he's eventually picked up by Elizabeth Berkley driving a Tesla Model S.)
But wait, all is not lost! Within the past few days, Faraday Future received a one-year, $13.75 million loan from investors at Innovatus Capital Partners. Ordinarily, $13.75 million would probably cover about half of Faraday's foosball table budget for a month, but in the new, level-headed Faraday, it's enough to lease an old tire-making factory in Hanford, California.
Faraday has moved about 300 of its 1,000 employees from the Los Angeles area to Hanford so they can begin converting the 1 million square-foot plant into a manufacturing facility for its vehicles.
Is this a turning point?
Maybe, maybe not.
On the one hand, many of us believe that this is the sort of thing Faraday should have done at the very beginning. It made no sense for the start-up to commit hundreds of millions of dollars to build a new plant when there were equally viable sites already on the market. It appears that Yueting and his staff simply wanted to make a bold statement, and now, they've wised up to the harsh realities of the auto world. Good for them.
On the other hand, Faraday's tone sounds as aggressive as it's ever been. In speaking about the new plant, Reckhorn--the same Reckhorn who'd previously prioritized doing things right above doing things fast--said that "Our new production facility is the latest demonstration of our commitment to getting FF 91 on the road by the end of 2018. Despite significant head winds on the path ahead of us, we are laser-focused on that one key milestone."
Just a reminder that the end of 2018 is about 16 months away. Also, the plant's current tenants won't move out until late November. Having the facility ready to produce cars by December 2018 seems...ambitious.
Look, we understand that investors are starting to have doubts about Faraday and that the company is desperate to show results. But when your company's history is littered with slip-ups and your fate rests on the success of a $100,000 electric car that hasn't exactly drawn accolades from the press, maybe you should check your work.
For more on this, visit our colleagues at Motor Authority.