Earlier this month we reported that construction of startup electric carmaker Faraday Future’s $1 billion Nevada factory was halted due to financial problems, but it now looks like $600 million in funding for its parent LeEco could get the project up and running.
A report from Reuters said that the money is for supporting Faraday’s automotive endeavor and LeEco’s high-tech business pursuits.
According to Reuters, Leshi Holdings, the umbrella corporation for LeEco and Faraday Future, received funding from 10 Chinese companies, and an initial $300 million was to be invested in LeEco by yesterday, with the other half to come at a later date.
LeEco has invested in high-tech consumer products from Faraday electric cars, to smartphones and televisions with its recent $2 billion buyout of California-based Vizio.
The company has been facing a shortage of cash and suffering from expanding too fast and in too many directions, its chief executive Jia Yueting told staff in a letter last week.
The funding announcement comes amid concerns that the cash-strapped group could run into a crisis or abandon its electric car ambitions — a project which has already cost it $1.5 billion in development according to Jia himself.
Jia has been vocal about LeEco’s ambition to usurp Tesla Motors with its electric supercar in development with Faraday Future.
It is not known if any of the initial $300 million would be used to pay millions of dollars in unpaid contractor bills that forced a work stoppage on Faraday’s Nevada manufacturing facility.
Reuters reported that Richard Windsor, an independent technology industry analyst, said he expects financial pressures to force LeEco out of its automative business, where the company has little competitive advantage.
“I suspect that the automotive ambitions will be reluctantly curtailed which I think gives LeEco its best chance of success in its other endeavors,” he said.
In other words, it’s wait and see if Faraday Future brings its electric car to market or if it goes down the drain only to be remembered by automotive historians in the future.