Since Chinese-backed electric automotive startup Faraday Future burst onto the scene about a year ago with lots of hype but little to show for it, one big question has lingered: how did FF secure a $335 million deal with the State of Nevada when no one knew how much money the company really had? As it turns out, the Nevada State Legislature had no idea either; they bought into Faraday Future sight unseen, according to state officials who spoke to Jalopnik today.
While Faraday Future swears that a production version of its supposedly Tesla-slaying (and supposedly very fast) electric car is coming to CES in Las Vegas next month, work has stopped on the Nevada factory where Faraday Future got $215 million in tax credits and abatements and $120 million for infrastructure improvements. But on the strength of what?
Nevada’s State Treasurer Dan Schwartz, who has emerged as a major skeptic of FF, told me today that his department and the Nevada State Legislature—which signed off on the deal—were in the dark.
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“The Treasury was not in any hearing,” Schwartz said. “Faraday Future gave financials to Steve Hill [Director of the Governor’s Office of Economic Development], but he didn’t give them to the legislature.”
Hill did not respond to calls or emails seeking comment from Jalopnik. A Faraday Future spokesman said, “As a private company we do not comment on the details of our finances.”
The news of this lack of information was something of a shock, and it seemed extraordinary that neither the State Treasury nor the State Legislature voting to approve the deal got to see any proof of Faraday Future’s financial health. “That’s exactly right,” Schwartz concurred.
“The financials of the company were marked confidential and not shared,” Schwartz noted. “We [at the Treasury] asked for a financing plan, but have never seen it,” Dan furthered. “And that was a year ago.”
Ira Hansen, one of the four State Assembly members who voted no on the Faraday Future deal at the time, also backed up Dan Schwartz’s account.
“We got nothing,” said Hansen, a Republican who represents the state’s District 32. “All we got was a rosy scenario.”
It is indeed very surprising to hear Nevada gave so much to a company about which it knew so little, but it’s important to understand the context how job-desperate Nevada is to understand how the FF deal went through with so little scrutiny.
This was also before Faraday Future disappointed the world at this year’s CES. After months of hype, the world expected Faraday Future to show a production-ready vehicle. Instead it showed a nonfunctioning dream car that cost the company $2 million, the FFZERO1, pictured at the top of the article.
Only now is there any indication that Faraday Future will finally show their intended production vehicle at the upcoming 2017 CES, but things look rough from inside the company, and they don’t even have an operating factory at the moment.
Hansen explained that he asked Hill, the Economic Development director, about the health of Faraday Future about a month ago as more and more grim assessments about the company and its Chinese tech mogul backer Jia Yueting made the news.
“I sent emails to Steve Hill when I heard contractors weren’t getting paid,” Hansen said, saying he asked for the Faraday Future financials he never got back in December. “He told me he would not provide them because they were marked confidential.”
Hansen also noted that the deal itself was “ramrodded” by the Governor’s Office and that the legislature “basically rubber-stamped it.” He added, “this is a disaster waiting to happen.”
“The governor is not very open on the subject,” Schwartz said.
If you have any information on Faraday Future, please email me at raphael at jalopnik dot com.