Faraday Future abandons plans for North Las Vegas plant

LAS VEGAS, Nev. - Automaker Faraday Future is scrapping plans to build an assembly plant at Apex because of a cash funding crunch.

The electric car maker made the announcement Monday saying, "We are in a precarious situation right now." The company was to be the centerpiece of a planned major complex in the northern part of the valley.

Riddled with financial problems, Faraday Future is looking for an already-built warehouse to use to manufacture its first cars.
The company is looking to find a separate facility in either Nevada or California to build its product more cheaply and quickly.

"Faraday is what they are; they're a startup," said Ryann Juden, North Las Vegas.  "They've always been a startup; they're still a startup today."

Faraday has faced questions about its economic viability. Last week, a Chinese court froze $182 million in assets tied to it's parent company LeEco.

North Las Vegas Mayor John Lee sent out a statement saying, in part: ... "Faraday has played an important part by investing almost $50 million in land improvements and critical design and engineering work at Apex Industrial Park..."

Steve Hill, the director of the Governor's Office of Economic Development, released the following statement:

"Throughout the process of working with Faraday, the state recognized both the opportunity a large manufacturing facility could provide as well as the inherent risk associated with a start-up company attempting this endeavor."

So what’s next?

State lawmakers passed a big tax incentive and infrastructure improvement deal worth $335 million. The money would only come into play if the company made a billion dollars in investments in southern Nevada, but that's not happening.

North Las Vegas leaders say the potential flop does not leave the city hanging.

According to Juden, as soon as Faraday broke ground at Apex, the city had an economic recruiting tool.

"Faraday wasn't a taxpayer.  They were going to be abated by the state for 10 years, so what Faraday was going to do was it was going to open up the opportunity out at Apex."   

Juden attributes much of the 17 million square feet of new industrial space thousand jobs, and a billion dollars in investment over the last four years in North Las Vegas is due to Faraday.

"Those were all things we were able to attract to southern Nevada, and we were able to attract to North Las Vegas, whenever Faraday was known to the world," Juden said.

Billionaire backer Jia Yueting made headlines for money troubles.  Lawmakers have passed bills allowing the city to push forward with development without depending on the startup as a major tenant.

In an interview in February, Nevada's top economic development official told 8 News NOW the state did its due diligence to protect taxpayers in case Faraday flopped.

"It's a significant project, and we wanted to make sure that we provide the opportunity for Nevada, but protected the citizens from any downside," said Steve Hill, GOED Director.
  
The bottom line? -- Taxpayers are not on the hook for the Faraday flop.
  
Faraday paid its taxes into a trust, to be returned in 10 years if the company spent a billion dollars in Nevada. The tax money will now go into the state coffers as if the deal never existed.

 


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