The Chinese-backed automotive startup is behind in payments to lead contractor AECOM, according to Automotive News (subscription required). The industry trade journal sourced an October 10 letter from AECOM to Faraday citing an unpaid $21 million deposit due in September. The letter gave Faraday 10 days to make the payment, which was for an escrow account to cover material costs and subcontractor work.
The letter also listed upcoming payments of $25.3 million for October, and $11.8 million for November. AECOM is overseeing $500 million worth of work on the 3-million-square-foot factory, which has a stated price tag of $1 billion. Faraday broke ground in April, although significant work reportedly did not begin until July. So far, most of that work has consisted of grading the 900-acre site. Construction of buildings has not started.
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In response to the Automotive News report, both Faraday and AECOM issued a statement reaffirming their commitment to work together. It said the two companies’ business relationship was “strong” and that both companies want to see the factory project continue. A Faraday spokesperson said no work stoppage would take place, although it is conceivable that AECOM will halt work if it does not receive payment.
Faraday is backed by Chinese billionaire Jia Yueting, founder of tech giant LeEco, but that connection hasn’t made it immune from questions about its financial stability. Earlier this year, Nevada state treasurer Dan Schwartz questioned whether Yueting’s assets would be sufficient to cover the cost of the factory. Nevada lured Faraday to North Las Vegas with a $215 million incentive package. In March, Faraday posted a $75 million bond and placed $13 million in an escrow account, to reassure lawmakers.
Faraday plans to unveil its first production car at CES in January. The annual electronics trade show is held in Las Vegas, not far from the company’s factory site. Faraday unveiled its flashy FFZero1 concept car there this past January, but has offered virtually no details about the production model.
