Faraday Future, the mysterious electric car startup that (for now, at least) seems to only have a lot of big names and big funding, but California wants to help it even more. So the state wants to give the company $12,725,000, in exchange for a promise to create 1,990 full-time jobs and an investment of over $300 million.
And while you Californians out there may be ready to get riled up over what you think may or may not be vaporware, hold that ire for a second.
The $12.7 million comes in the form of a tax credit to the company, which, according to the agreement between FF and the state, “intends to manufacture electric vehicles including competitiveracing and electric consumer automobiles.” Of course, states don’t just hand out free money, and the company isn’t getting it all right away. Faraday needs to give those jobs in return, and California wants to make sure it happens. So for the next three years, it needs to employ a set number of people before it even sees a dime.
The first tax credit would total $2,000,000, in 2019, with the second, making up the remaining balance of $10,725,000, would only show up in 2020. And that’s only if Faraday meets its obligations under the agreement, which, for any startup is a very big if.
Faraday told the state government that in 2015, it employed just 236 people in California, where it’s based. To hit its first target, it needs to more than triple the size of the company in 2016, and hire 632 more full-time employees with a base salary of $45,000 per year, with the average of those 632 employees making $125,000 a year. In addition, it needs to invest $50,200,000 of its own money in the state. And that’s just this year.
California isn’t forcing Faraday to maintain that wild level of growth, however, and it’s only making the company promises to add another 458 employees in 2017, and so on, until it gets up to 1,990 jobs added (with those salary requirements as well) in 2020, with $311,117,460 total invested in the state by the company.
Which actually doesn’t sound that bad, and is a solid bet for California. It doesn’t actually risk a lot – $12.7 million isn’t huge in a state with a $113 billion budget. And California doesn’t have to pay out for another three years, and that’s only if Faraday actually becomes something. If Faraday becomes another vaporware story, the state doesn’t have to pay a dime.
But if Faraday becomes another Tesla? Then everybody looks smart.
The full text of the agreement is below, for your own perusal: