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Faraday is part of a network of young electric vehicle (EV)
firms in China and the United States backed by Jia, who has said
his company LeEco - that grew from a Netflix-like video website
to a business empire spanning consumer electronics to cars
within 13 years - is facing a severe shortage of cash after
expanding too fast and in too many directions.
Struggling to support goals that included beating Elon Musk's
Tesla Motors <TSLA.O> in premium EV making, Jia is now trying to
ride out the cash crunch by taking measures such as halting work
on the Las Vegas factory and selling a Silicon Valley property
less than a year after buying it from Yahoo Inc <YHOO.O>.
On the latest decision to shift production of Faraday's luxury
electric SUV FF 91 to a new site, the startup said: "This will
allow product production to be realized faster, as well as allow
our future strategy to be implemented more effectively."
For LeEco, this marks a second major setback to its ambition to
become a major EV manufacturer after it recently pulled out of a
joint project with British sports carmaker Aston Martin to
develop RapidE electric car.
Faraday had initially planned to open the Las Vegas factory late
in 2017, with a product portfolio of seven models - an estimate
that was later slashed to two, including the FF 91.
Jia, who posted the Faraday statement on his social media
account, did not name the new FF 91 production location. Faraday
will continue to own the Nevada factory site.
The FF 91 has been described by its designer as "weird-pretty"
and Faraday executives say it will be the most technologically
advanced vehicle of its kind on the market when it goes into
production in early 2018. But cash shortages have raised
questions about the company's prospects.
According to estimates from mutual fund investors, LeEco could
see the market value of its listed unit, Leshi Internet
Information & Technology Corp Beijing <300104.SZ>, fall around
$2.5 billion should its shares resume trading.
The company is set to hold an extraordinary shareholders'
meeting on July 17 in the Chinese city of Shenzhen.
(Reporting by Jess Macy Yu, Editing by Himani Sarkar)
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