Last winter, Faraday Future came out of nowhere with big promises to upend the auto industry and redefine the entire idea of how we get around. None of that has happened because making cars is hard. Now, a tax deal between the state of Nevada and FF is officially over, and the would-be automaker has handed back all the incentive money it got from the state.
Before I explain what happened this week, let’s start from the beginning. Faraday Future, backed under suspicious circumstances by Chinese tech giant LeEco, planned a $1 billion factory in North Las Vegas with help in the form of a $335 million tax incentive package from the state.
There are so many weird things about Faraday Future, from the mind-blowing claims made at the 2016 CES debut to demo cars packed with improbable technology to the fact that it’s never really had a true CEO, but rather shots are called by LeEco boss Jia Yueting. Money problems have been chronic, turnover is rampant, and evidence has long led us to believe the company maybe just exists to create electric and autonomous car technology for LeEco to capitalize on. (More on that in a second.)
Anyway, none of that panned out, and despite rolling out prototypes at CES this year, FF has since canned the Nevada factory and announced a pivot to “user-ship personal mobility,” whatever that means.
Now FF and Nevada are officially done as of this week. From The Nevada Independent:
Steve Hill of the Governor’s Office of Economic Development told the agency’s board on Tuesday that the Southern California-based company sent a letter in recent weeks voluntarily relinquishing its status as a “qualified project” eligible for a state tax abatement and infrastructure building package. Faraday also cut a check for $16,200, thus returning all the incentive money that it had received from the state.
“The Faraday project is basically dissolved at this point at absolutely no cost to the state and local governments,” Hill said.
Under the terms of a deal approved in late 2015, most of the taxes the state was waiving for Faraday would be kept in a trust fund and remitted to the company once it invested $1 billion in a factory in North Las Vegas. But Faraday didn’t reach that bar before the company’s primary funder ran into money troubles and the carmaker announced plans to pursue a smaller factory in an existing building in Central California.
Indeed, FF has moved on to another factory, this time a smaller one in California instead of the planned mega factory in Nevada. Lately FF in general has been more quiet and more realistic about its operations, so maybe with the grandiosity dialed down it can act like an actual startup and grow organically.
Meanwhile, The Verge this week uncovered documents that confirmed what we reported last year: that LeEco, which is supposed to be an investor in FF but a separate company, was in fact using FF employees and resources to design LeEco’s electric car. And as that story notes, one big reason (of many) that FF is in trouble is that Jia Yueting’s money seems to be evaporating. He has stepped down from various arms of his companies as Chinese courts crack down over his various unpaid loans.
FF may have returned all of Nevada’s incentive money, but one has to wonder how much taxpayer money was spent overall in this debacle that went nowhere and brought no new jobs to a region that badly needs them.
Car startups, everyone!