Faraday Future puts the brakes on $1B NV factory construction

Dive Brief:

Electric car company Faraday Future has suspended construction on its $1 billion North Las Vegas, NV, manufacturing plant until early next year, AECOM told the Las Vegas Review-Journal.
AECOM, which was awarded a $500 million guaranteed-maximum-price construction contract in October to build the plant, said it has completed the grading and foundation preparation work at the 900-acre site and that it remained "fully committed" to the project.
From the time Faraday announced it had chosen Nevada as the site for its factory, state lawmakers have expressed concern over the company's funding means — largely due to backer Jia Yueting's alleged financial problems — despite providing the company with a $320 million incentive package to make the move.

Dive Insight:

Faraday is erecting its 3-million-square-foot factory in the same business park where Hyperloop One is building a test track for the high-speed transportation technology on its own 50-acre site. When the company first announced its aggressive timeline of bringing its first electric car, the FFZERO1, to market by 2017 in order to compete with the release of Tesla's Model 3, industry insiders expressed doubt that any company could go from drafting table to mass production in the 18 to 24 months Faraday described.

State lawmakers were also doubtful about the notoriously secretive company's ability to fund its factory's construction, particularly since backer Yueting seemed to be embroiled in his own financial issues back in China. Yueting is the billionaire head of Chinese tech company Leshi, which suspended trading of its stock for six months while purchasing a film company. This is reportedly the norm in China, but it spooked Nevada officials into requiring a multimillion-dollar bond and a construction escrow account to ensure payments on the project.

In late October, several news outlets reported they had gained access to a copy of a letter from AECOM to Faraday threatening a work stoppage because the company had allegedly failed to keep up with its construction escrow account deposits.

Northern Nevada has seen a significant uptick in popularity recently. State officials have said major companies are seeking the area out as a place to do business, a major change some would attribute to Elon Musk and his Tesla gigafactory. Since construction on the gigafactory began, the number of local business licenses has skyrocketed. Switch, developer of SUPERNAP data centers, is also constructing a $1 billion data center near Tesla.