Wednesday, April 13, 2016 | 2 a.m.
Electric car company Faraday Future is scheduled to break ground this afternoon on its Southern Nevada production plant, the centerpiece of a vision to turn North Las Vegas into a manufacturing powerhouse for the region and make the state's economy less dependent on tourism, gaming and mining.
Faraday Future executives, Gov. Brian Sandoval, North Las Vegas Mayor John Lee and Clark County commissioners Steve Sisolak and Marilyn Kirkpatrick are expected to attend the groundbreaking ceremony, which comes four months after the state leaders approved a $215 million package of incentives to lure Faraday to the area. It also comes three months after Faraday officials had said they originally planned to get the project underway.
Faraday representatives told state officials in January that the company hoped to break ground on on its 3.4 million-square-foot facility by the end of that month. However, company spokeswoman Stacy Morris said the company meant that it would begin clearing the land out at the site in that time frame, which it did. Earlier projections from the company had put a groundbreaking somewhere in the first quarter of 2016.
The groundbreaking comes amid what industry publications have considered a series of setbacks for the company. Faraday lost its chief battery architect a couple of months ago, right before the debut of its concept car at CES. Its billionaire investor Jia Yueting is the CEO of the Chinese Internet giant LeEco, whose shares were halted from trading on the Shanghai stock exchange in December. LeEco, formerly known as LeTV, is one of Faraday’s official partners and has close ties to the company.
However, Morris said the developments were “definitely not” setbacks, adding the company employed a battery team with about 70 engineers that was “operating as business as usual.” She said Faraday’s funding “remains unchanged” as a result of the halt of trading of LeEco shares, as LeEco is a separate company.
“We’re moving so fast and hitting lots of great milestones,” Morris said.
At a meeting in March, Steve Hill, the governor’s chief economic development aide, corroborated that sentiment, saying that Faraday had demonstrated its intention to move forward on the North Las Vegas project.
“They are clearly intending to do this,” he said. “They would not be intending to do this if they did not have the financial backing to get up and running."
Over the last several months, Faraday has been working to secure seven parcels of land for a total of about 900 acres at North Las Vegas’s Apex Industrial Park, an 18,000-acre site where Interstate 15 meets U.S. Highway 93 on the outskirts of the metropolitan area.
Using a limited liability company, Faraday closed on more than 30 acres of land in March and early April, according to Clark County records. The company is in the last stages of finalizing the purchase of the biggest two parcels of land, Morris said.
“It’s so much more complicated than everyone probably realizes,” Morris said. “What we’re doing is taking a four year project and condensing it into two years. We’re just moving as fast as we possibly can.”
However, the company has already hired some of its key Nevada positions, including a recruiter, a plant director and a head of logistics for the plant, Morris said. Hiring for other positions is underway.
When the company launched last summer, it initially had projected it would bring a car to market by 2017. Now, Morris said it would do so “in the next couple of years,” adding that the company’s first production vehicle will be a premium car, not a mass-market vehicle.
Although the production car is the company’s ultimate goal, much of the company’s public activity has been focused on a niche area of high-end race cars.
At its CES unveiling in January, Faraday presented its FFZERO1 concept, a 1,000-horsepower, one-seater race car that was projected to go from 0 to 60 in less than 3 seconds. Most recently, the company served as the title sponsor for a Formula E race in Long Beach, what it described on its site as an opportunity to highlight the capabilities of electric vehicles. Faraday could also benefit from a partnership between LeEco and Aston Martin, the British luxury car manufacturer.
Asked whether race cars were a focus for the company, Morris acknowledged that Faraday had emphasized performance in its cars, but said the main focus was offering a “connected and technology-focused vehicle.”
Since January, the company has made some technical progress. It was awarded a patent for a power inverter, which converts DC power to AC power, that it said had an improved design. And the company has plans to showcase a production car, which could give a glimpse into its plans for the larger market. During a January speech to a group of Las Vegas business executives, Dag Reckhorn, a Faraday vice president, said the design had been completed.
“We expect to showcase our first production car sooner than the world expects,” he said.
In Long Beach last week, several industry publications reported that Faraday teased a silhouette of a crossover on its modular body that some have speculated could be a production car.
Nevada officials hope Faraday will be a transformative project for the region, spurring further development at Apex with hopes that some of Faraday’s suppliers and other businesses will follow suit and move to the park. Apex has remained relatively vacant for decades with the exception of a handful of businesses and a landfill.
To that end, state lawmakers created a tax incentive structure and workforce training program at a special session of the Legislature in December to lure Faraday to Nevada. Soon after, the state’s economic development board approved $215.9 million in tax incentives for the company, finalizing the deal with Faraday.
In that legislative package, lawmakers built in a series of protective measures for the state in case Faraday should go belly up. In line with that legislation, Faraday promised in March to secure a $75 million bond to cover the state’s investment in infrastructure improvements at the site.
Despite those legislative safeguards, state treasurer Dan Schwartz has continued to raise doubts about Faraday over the last few months, even looking into Yueting on a personal trip to China in February.
The governor, however, has stood behind the state's deal with Faraday.
“To the members of the Legislature here today and the taxpayers of Nevada, I offer my commitment,” Sandoval said at a December news conference. “This deal is good for us.”
Construction won’t begin immediately at the site. Faraday is in the process of negotiating construction contracts, and work could begin as soon as those are final, according to the company’s spokeswoman.