Published Monday, July 10, 2017 | 11:01 a.m.
Updated Monday, July 10, 2017 | 1:55 p.m.
Upstart electric car company Faraday Future announced today it would stop work on a $1 billion manufacturing plant at the Apex Industrial Park in North Las Vegas.
Faraday said it is shifting its attention to a new facility to accelerate the start of production on its flagship vehicle, the FF91.
“As a result of this shift in direction, we are in the process of identifying a manufacturing facility that presents a faster path to a start-of-production and aligns with future strategic options,” Faraday said in a statement. “As the land owner, we remain committed to the buildout of the Apex site for long-term vehicle manufacturing and firmly believe North Las Vegas is an ideal place for us to be.”
The company said it would reveal more details about its strategy in the coming weeks.
A North Las Vegas source with knowledge of Faraday’s dealings said city officials weren’t surprised by the news.
The company has been mired in financial troubles and had $183 million in assets frozen by a Shanghai court because of missing loan payments tied to LeEco, Jia Yueting’s Chinese media group. Yueting, the owner of Faraday, resigned last week as chairman of LeEco's main leg, LeShi Internet Information and Technology.
Faraday suspended construction of the North Las Vegas plant in November, with plans to resume building this year. At the project's peak, Faraday provided jobs for 327 construction workers and 24 direct employees, according to the the Governor's Office of Economic Development.
Despite the setback, North Las Vegas Mayor John Lee said the city has plans to move forward with other projects at Apex.
"The state, county and city are focused to ensure Southern Nevada has a large-scale industrial park developed and ready for job creators to diversify our regional economy,” Lee said.
"Faraday has played an important part by investing almost $50 million in land improvements and critical design and engineering work at Apex Industrial Park, creating a momentum that has attracted multiple Fortune 500 companies hiring 7,000 Nevadans and investing more than $1 billion that has stabilized and transformed our community," Lee said.
Gov. Brian Sandoval and state lawmakers approved $215 million in tax breaks and $120 million in infrastructure upgrades for the project at a special session of the Legislature in December 2015.
Sandoval said today that Nevada taxpayers would not be left holding the bag.
“The agreement between the state and the company required a trust fund to hold any earned abatements until the company achieved a $1 billion investment,” Sandoval said. “While I’m disappointed in today’s announcement, I can say with certainty that Nevada’s citizens were held harmless financially.”
The Governor's Office of Economic Development said the approximately $614,000 accumulated in the trust fund would be credited to the state and local jurisdictions that would have collected it.
“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," said Steve Hill, director of the office.