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Friday, November 6, 2015
Faraday Future Aims to Take on Tesla Motors With $1 Billion Investment
As reported by The Wall Street Journal: Faraday Future Inc., an electric-car startup aiming to take onTesla Motors Inc.,on Thursday said it is considering four states for a $1 billion factory that would begin making its first cars in 2017.
The Gardena, Calif., company launched 18 months ago with private funding, has grown to more than 400 employees. Faraday Future Product Development Chief Nick Sampson said the company is looking at sites in Nevada, Louisiana, Georgia and California for the plant and would announce the site “in the next few weeks.”
Mr. Sampson is one of a team of former Tesla executives now leading Faraday Future. Like Tesla, Faraday Future is named after an inventor from the 19th century.
Tesla, more than a decade old, has shown how costly it is to break into the auto industry with electric cars. Even though volumes have steadily grown in recent years, the Palo Alto, Calif., car maker has posted 10-consecutive quarterly losses as a public company and routinely burns through more than $100 million in cash a month, requiring a steady pipeline of new financing.
Faraday Future has recruited personnel from BMW AG and General Motors Co. in addition to Tesla. It has promised to deliver a long-range, premium electric car sometime in 2017 that rivals Tesla’s pricey Model S sedan.The $1 billion investment plan is a significant commitment for a company that is virtually unknown. Faraday declined to say where it is getting the funds to finance the manufacturing plant.
“That sort of an amount is going to come from a different number of sources,” said Mr. Sampson, who was the lead chassis engineer for Tesla’s Model S before leaving in early 2012. “We are keeping our partners confidential.”
‘We are keeping our partners confidential. ’
—Nick Sampson, Faraday
The company has been adding dozens of employees every month and is renovating Nissan Motor Co.’s former Southern California sales headquarters as its home location.
Faraday’s plan is to break ground on the plant in early 2016 and begin production sometime in 2017. It is considering a rebuild of an existing factory or building a new plant from the ground up. Mr. Sampson said the company has secured parts suppliers and has begun to make purchase orders for components.
Faraday is one of several companies attempting to create an electric car to compete with Tesla. Ateiva Inc., backed by Beijing Automobile Industry Holding Corp. and Leshi Internet & Technology Co., also is developing an electric car in Silicon Valley. It is run by a former a Tesla engineer, Bernard Tse.
Karma Automotive, formerly Fisker Automotive, which is based in Southern California, has revived its hopes after China’s Wanxiang Group Corp. bought the failed hybrid-electric supercar maker out of bankruptcy in 2014. The company has secured a manufacturing facility in Southern California and is planning to sell a new car in 2016, according to its Web page.
Faraday was operating under the radar until a few months ago when it announced its intentions. Its first vehicle will have a battery pack that is larger than the one offered on Tesla Model S or Model X and will feature a variety of connected car features. But Mr. Sampson wouldn’t elaborate beyond that.