Faraday Future might talk a bunch of shit, but maybe executives at the start-up automaker should hold back for awhile because its financial troubles are becoming crystallized. It’s main-backer, a Chinese billionaire, is looking to sell expensive land it purchased from Yahoo only a year ago, thanks to a serious cash crunch.
There’s a lot about this land deal (which we covered at length last December here). But the upshot of the sale is this, per Reuters:
LeEco’s billionaire founder and CEO Jia Yueting admitted in a letter to staff in November that the firm was facing a “big company disease” and battling a cash crunch after expanding at an unprecedented rate.
[...] Now cash-strapped and struggling to repay a pile of debts to suppliers and business partners, LeEco plans to sell the U.S. site to little-known Chinese developer Genzon Group for $260 million, $10 million more than what the firm paid for it in June, said a source with direct knowledge of the deal who did not want to be named due to rules on talking to media.
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Hey, $260 million! That might help square away the bevy of contractors suits that have been shoveled Faraday Future’s way in recent months. In a statement to Reuters, LeEco—the Chinese company backing Faraday who controls the land in question—played coy and said it was looking for a “development partner” for the land.
As Reuters noted, LeEco is “developing luxury electric vehicles with Faraday Future in the United States, a startup Jia funds and controls.”
However, the outlook remains unclear after Faraday said it was scaling back production plan at a factory it has yet to build in Nevada.
Oof. Now that’s certainly a succinct way to sum up the shitpile of a situation here.