Faraday Future, the electric car company based in California, has announced it is scrapping its plans for an assembly plant in North Las Vegas because of a cash crunch, according to Business Insider.
Instead, it is looking for an existing facility in Nevada or California where it can build its first car.
The announcement is not a big surprise. Work stopped on the construction site for the facility in November 2016. At the time, a spokesman said that the company wanted to put money and attention toward developing a concept car at CES 2017.
Nevada State Treasurer Dan Schwartz said at the time he didn't believe the company had the money to fund the project. But, North Las Vegas city leaders said they were confident that Faraday would eventually finish the facility.
The company says it is keeping the 900 acres it bought for the plant at Apex in case they decide to build there in the future.
The state of Nevada had pledged up to $335 million worth of incentives toward the project and the College of Southern Nevada and Southeast Career Technical Academy had teamed up to offer a program to train students for high-tech careers in anticipation of Faraday Future coming to the valley.
Steve Hill, Director of the Governor's Office of Economic Development, issued the following statement:
Faraday Future has informed the Governor's Office of Economic Development (GOED) that it has put the construction of its factory in North Las Vegas on hold.
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. In order to completely protect the citizens of Nevada from risk, the agreement with Faraday requires the company to fully invest a minimum of $1 billion in order to receive any state incentives. In accordance with this agreement, Faraday has paid all taxes owed to a Trust Fund established by the state. The agreement with Faraday held Nevada’s citizens harmless from the risk associated with this project.
State Treasurer Dan Schwartz also issued the following statement:
“We all make mistakes, but this one was obvious. Long after it became apparent that ‘a mysterious Chinese billionaire’ and Faraday Future could never build a $1 billion electric auto plant, Nevada state officials continued to insist that Faraday Future would magically create 4,500 jobs in North Las Vegas. Now, Jia Yuteng, Faraday’s funding source, has had his assets frozen by a Shanghai court and is under increasing scrutiny in China for what amounts to fraud; the automobile plant is just a pile of sand in the APEX Industrial Park; and, the promised jobs are yet another mirage in the Southern Nevada desert.
“The only good news is that the Treasurer’s Office continued to press for financial information from Faraday and refused to issue the $175 million bond without detailed information.
“Welcome to Nevada, where good government takes a back seat to bad deals.”
Statement from North Las Vegas Mayor John Lee:
The State, County and City are focused to ensure Southern Nevada has a large-scale industrial park developed and ready for job creators to diversify our regional economy, and Faraday has played an important part by investing almost $50 million in land improvements and critical design and engineering work at Apex Industrial Park, creating a momentum that has attracted multiple Fortune 500 companies hiring 7,000 Nevadans and investing more than $1 billion that has stabilized and transformed our community.
Statement from Faraday Future:
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. 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.
Accordingly, we have decided to put a hold on our factory at the APEX site in North Las Vegas. As the land owner, 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.
We would like to thank our partners in Nevada for their continued support throughout this process: Governor Sandoval and his office of Economic Development, Clark County and Mayor John Lee and the North Las Vegas officials.
More details on Faraday Future’s new strategy will be shared in the coming weeks.
The Community of Southern Nevada issued this statement about their program:
With the support of the governor's Office of Economic Development, the College of Southern Nevada will continue to move forward with its training program in response to demand from local manufacturers. We are excited to help provide a trained workforce for companies such as Clear Water Paper, Unilever and Ocean Spray, among others. We are grateful to Governor Sandoval for his continued efforts to diversify our state's economy.