USA TODAY International Edition
Things looking up for Faraday Future
Electric- car maker leases factory after months of skepticism
Tesla is getting SAN FRANCISCO the lion’s share of electric- automaker publicity of late with the recent rollout of its entry- level Model 3 sedan.
But a would- be rival has signaled it hopes to steal some of that spotlight soon.
Los Angeles- based and Chinese- backed Faraday Future announced Sunday it has leased a 1- million- square- foot former tire factory in Hanford, Calif., a few miles west of Visalia in the state’s arid Central Valley.
Faraday Future executives say they hope to begin production of the company’s flagship FF 91 vehicle by the end of 2018.
“Time- to- market is important to our overall strategy,” Stefan Krause, Faraday Future’s CFO and COO, told USA TODAY. Krause, a former chief financial officer of BMW, added that “there is a value to being second to Tesla; it’s a good market position. At BMW, we were an endless second to Mercedes- Benz until we beat them” in sales earlier this year.
The lease agreement in Hanford comes less than a month after Faraday Future announced it would put on hold its plans to invest $ 1 billion in a new factory in Nevada. The company still owns the land at a site near Las Vegas.
That initial commitment, along with a splashy unveiling of a race car at the 2016 Consumer Electronics Show, brought Faraday Future a rash of publicity that wasn’t followed up by product.
Analysts and auto world watchers grew even more skeptical when Faraday Future’s main benefactor, Chinese tech billionaire Jia Yueting, had around $ 200 million in assets frozen by Chinese authorities because of unpaid loans and was forced to step down from some of his publicly traded companies.
Financial issues, in fact, sent Krause on a recent world tour to drum up interest from private investors as Faraday Future looks to secure $ 1 billion in Series A funding, which it hopes to land later this year.
“I met 35 investors, and there’s a lot of interest in the EV industry,” says Krause, adding that Jia has allowed him to sell some of his U. S. assets to serve as bridge funding until the Series A money comes in. “We don’t have the luxuries we had in the past; that’s why we’re so happy we found Hanford and can move forward.”
About a third of Faraday Future’s 1,000 employees spent this past weekend on an initial cleanup of the facility, which many years ago had been a Pirelli tire plant before being leased out in parcels to various entities.
Among those organizing the cleanup was Dag Reckhorn, Faraday Future’s vice president of manufacturing. The Tesla veteran is in charge of turning Hanford into the birthplace of the FF 91.
“( The factory) has so many things we need; it’s next to a rail line, has gas, water, power and space,” Reckhorn says. “In the automotive manufacturing world, you need all these things or you start to bottleneck yourself before you even start.”
Reckhorn says that another attractive aspect of the Hanford opportunity was that the landlord was willing to grant Faraday Future access to the facility now but would only start collecting rent in early 2018. He adds that the factory can start operating as soon as improvements are made and state regulators ensure that paint and other facilities meet environmental standards.
Over the course of the coming months, Faraday Future staffers will not only clean the facility but also reinstall the air conditioning, improve the lighting and hook up gas and power lines. Then Faraday Future’s auto- making machines will be installed.
Faraday Future hopes to be able to build around 10,000 cars a year at Hanford and employ as many as 1,300 autoworkers in the plant by 2019, “depending on customer demand for our product,” Reckhorn says. “We think there will be a lot of capable workers in the area, and we’ll work on training them as well.”
That’s a fairly small production run, considering Tesla currently makes around 100,000 Model S and X vehicles at its sprawling Fremont, Calif., factory east of San Francisco and hopes to add 500,000 Model 3s to that mix in a year or so.
That relatively small FF output would seem to imply that the company could make a good profit on each car, which means it’s likely to be a fairly expensive vehicle.
There is no price yet for the 1,000- horsepower four- door FF 91. But based on a recent USA TODAY visit to the company’s Gardena headquarters south of Los Angeles, a luxurious prototype with reclining rear seats had a lot in common with a $ 160,000 machine being promised by another EV company, Lucid Motors.
That’s a far cry from Musk’s $ 35,000- and- up Model 3 and more in competition with Tesla’s fully outfitted Model S and X sedans, which cost around $ 100,000.
Among the other possible competitors in the burgeoning if still small EV space — electric cars make up only 1% of U. S. auto sales — include NIO, formerly Next EV, as well as models from traditional automakers such as BMW, General Motors and Nissan.
Faraday Future officials also have suggested that their business model may not rely as heavily on consumer sales as much as perhaps making the FF 91 part of a subscription- based mobility model.
“We’re thinking of a variety a mobility models,” Krause says. “It’s a longer story.”
In the meantime, they’re the first to credit Musk for energizing a segment that had all but died in the face of stabilized gasoline prices. “( The Model 3) is another bold move from Tesla, and I really admire them for this,” Krause says.
About a third of Faraday Future’s 1,000 employees spent this past weekend on an initial cleanup of the facility.