UPDATE: 6:30pm PDT. Following the publishing of this story, we have learned that the supplier in question has now been paid in full. The story below has been modified to reflect this.
Back in January, enigmatic California startup Faraday Futures (or FF, as it prefers to be known) held what was supposed to be its revolutionary debut as a global automaker, technology powerhouse and global visionary at CES 2016. One month earlier, it was promised a massive $335 million incentive package from the State of Nevada in exchange for choosing a site just north of Las Vegas as the place to build a $1 billion automotive production facility.
Consequently, those in attendence at the CES reveal expected FF to unveil a near production-ready prototype of its revolutionary electric car to the world. Instead, FF unveiled an outlandish never-to-be-made single-seat sports car, talked about what made it different to other automakers, and promised that it would be unlike any automaker out there. Yet its supposed unique modular design platform seemed to us — and many of our colleagues in the International press — to be like any other well-designed electric car out there, with batteries low in the chassis between the front and rear wheels to give excellent handling and low center of gravity.
Since then, FF has gone somewhat quiet as fears over the financial solvency of its biggest backer — Chinese Internet billionaire Jia Yueting — have caused the state of Nevada to ask FF to put up a $75 million bond to ensure taxpayers aren’t left high and dry. Late last week, FF confirmed that it would do just that, easing tension between it and the Nevada legislature. At the same time, the company promised in an official letter to the Nevada Governor’s Office of Economic Development that it would add $3 million to an escrow account by mid-March and a further $10 million to the same by mid-May to finance its share of the funds needed to bring utilities to the site of its proposed factory.
So far, so good. But while FF is promising funds to the state of Nevada to safeguard taxpayer money, InsideEvs reports that things might not be going as well as last week’s letter suggests. Citing an anonymous source at one of FF’s supposed suppliers, the site alleges that FF has not been paying its bills and in the case of one supplier, is not returning calls any more.
InsideEvs says that after talking to one of FF’s suppliers over the weekend, it understands that the California company began a relationship with the supplier months ago. Since FF presented itself as well-funded, the supplier decided to extend its relationship with the startup, and offered it substantial credit in exchange for its custom.
“It certainly is true that they aren’t paying their vendors,” the anonymous source told the website. “They for the last month, won’t answer for us, won’t return calls and they owe us a good amount.”
“It is a chance you take when you extend credit to a new company like that, unfortunately,” the source continued.
Upon asking for the amount of money owed to it by FF, the anonymous source did not disclose the full figure, but did admit that it was “well into five figures.”
At this point, we should reiterate that the claims are alleged and, without any way to corroborate the anonymous sources quoted by InsideEVs, we cannot classify this story as more than a rumor at this stage.
However, given our past dealings with FF, our knowledge of the company thus far and the fact that Jia Yueting’s company LeTV remains suspended on the Shanghai Stock Market, we believe this story is certainly plausible and are inclined to believe it ourselves.
In keeping with our usual editorial policy, we have reached out to both FF and the Office of Nevada Governor Sandoval for comment. When we receive a reply, we will of course reproduce them below.
UPDATE: According to InsideEVs, the supplier in question now reports that their bill has now been settled in full by the automaker, suggesting that either a bit of unwanted public attention (and perhaps a fresh injection of cash) has meant that those outstanding bills have now been settled.
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