LeEco mired in fi­nan­cial cri­sis

China Daily (Hong Kong) - - BUSINESS -

China Hold­ings and oth­ers at the be­gin­ning of the year.

Partly as re­sult of the mount­ing fi­nan­cial pres­sure, Jia re­signed from all po­si­tions at the listed Leshi unit, step­ping down as chair­man, and left the board of direc­tors.

Jia said he would fo­cus on LeEco’s au­to­mo­bile busi­ness, which is not listed. He would es­pe­cially de­vote more time to Fara­day Fu­ture, the US-based startup he per­son­ally backs.

But Fara­day Fu­ture said on Tues­day that it halted plans to build a $1 bil­lion fac­tory in Ne­vada. “We are in the process of iden­ti­fy­ing a man­u­fac­tur­ing fa­cil­ity that presents a faster path to start-of-pro­duc­tion and aligns with fu­ture strate­gic op­tions,” Fara­day said.

Lu Zhen­wang, CEO of the Shang­hai-based Wan­qing Con­sul­tancy, said it is highly dif­fi­cult for Jia to suc­ceed in the cash-in­ten­sive au­to­mo­bile sec­tor, given LeEco’s wors­en­ing fi­nan­cial risks.

“Pro­duc­ing cars is far more com­pli­cated than mak­ing smart­phones. The faster an auto fac­tory grows, the more re­sources firms will need to keep it run­ning. It will take at least three to five years be­fore en­ter­prises gen­er­ate any profit from a car fac­tory,” Lu said.

Jia Yuet­ing, founder of LeEco

LIU YILIN / XIN­HUA

A vis­i­tor ex­pe­ri­ences LeEco’s VR glasses at a US prod­uct launch in Los An­ge­les, Cal­i­for­nia.

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