This secretive electric-car company is unfazed by doubts about its funding

Electric-car company Faraday Future (now called FF) says it’s getting equipment ready for the construction of its new factory in North Las Vegas, Nevada.

But officials in Nevada say that the proper permits have not yet been granted, and one has expressed doubts to Business Insider that the project will come to fruition.

What FF says it’s doing now

A statement from the company on Monday mentions:

  • Heavy equipment will arrive at the site next month
  • Construction company AECOM will spearhead work on the project
  • Staff will work out of an office inside North Las Vegas City Hall.

But while the statement says crews will begin grading land at the site in late June, North Las Vegas spokesperson Delen Goldberg tells Business Insider the grading permits have not yet been approved.

“There is no general timeline for how long such permits take,” Goldberg said in an emailed statement. “In this case, the city is waiting on a couple of documents from Faraday.”

Goldberg said once those documents are submitted, the city would review them and make a decision on the permits “within a couple of days.”

FF held a ceremonial groundbreaking for its planned 900-acre, $1 billion factory in Nevada last month. Shortly after the event, FF told Business Insider that it finalised deals to buy that land, but declined to reveal how much it paid.

Faraday Future
Faraday Future executives and Nevada state officials attend the groundbreaking ceremony of Faraday Future’s manufacturing facility in North Las Vegas, Wednesday, April 13, 2016. Bizuayehu Tesfaye/AP Images for Faraday Future

A secretive funding structure

Ever since FF came out of stealth mode and revealed its plans to build battery-powered autonomous cars, crucial parts of the company’s business have remained a tightly held secret.

We know that the company is based in Southern California, and is partnered with Chinese tech giant, LeEco, which is run by a secretive billionaire investor named Jia Yueting.

In previous conversations with Business Insider, FF has said that Jia is personally backing FF.

The privately held company hasn’t disclosed any other investors. FF has told Business Insider in several conversations that a “diverse” funding structure was in place.

The claim was echoed in a letter Jia sent to Nevada lawmakers in March.

The letter, which Business Insider has viewed, ;read in part: “While I am personally backing FF, there is also a diverse funding strategy to help us fully realise our mission and vision.”

A document released from a Nevada public agency last week sheds more light on the nature of FF’s dealings.

The document from the Southern Nevada Water Authority shows that, as of March, Jia Yueting held a 94% stake in a limited-liability company that purchased land on behalf of FF. Nevada in December granted FF hundreds of millions of dollars in tax incentives for the factory project.

The nature of FF’s funding structure has worried Nevada state treasurer, Dan Schwartz, who is responsible for approving some tax incentives related to the factory deal.

Those concerns stem from Jia’s apparent close relationship with the company.

The Wall Street Journal reported earlier this month that Jia has put up shares of his Beijing-based, publicly traded company — Leshi Internet Information & Technology — as collateral for personal loans, and that Jia uses that money to fund his businesses.

That strategy was seen as problematic because trading in Leshi stock has been suspended for nearly six months, prompting worries that it may have lost significant value in the interim.

LeEco Opening San Jose
A scale model of the Faraday Future FFZero1 concept race car at LeEco’s San Jose headquarters. Bryan Logan/Business Insider

A Nevada state official with knowledge of the FF factory deal tells Business Insider that there are significant doubts about whether FF can truly bring its ambitious plans to fruition. However, the project still appears to enjoy the full confidence and support of Nevada Gov. Brian Sandoval and North Las Vegas Mayor John Lee.

Lee, who helms the city where FF’s plant is to be built — and were some 4,500 jobs are expected to be created — said at last month’s groundbreaking ceremony, “We plan to succeed.”

In a statement to Business Insider last week, FF spokeswoman Stacy Morris said “Our business continues to grow steadily.”

FF is now vying for 150 acres in the city of Vallejo in Northern California, where it’s planning a second plant on the site of a former US Navy shipyard.

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