Faraday-Future-Scam
Faraday Future Has An Uncertain Future Outlook
Industry News
Over the next few years you will read about yet another new electric car company backed by venture capitalist money and government backed loans. Securing government backed loans for the creation of an electric car company is very profitable. The US government policy under the Obama era was to back the creation of green energy companies. So you raise private capital, often a few hundred millions and then you get matching capital from the government. You raise interest of your product through press coverage, build a fancy looking prototype and show it off to the tech industry world. Only the scam is that you don’t spend your own venture capital money, no you spend tax payers money, create a working prototype and draw up plans to build an EV production facility. You also use tax payers money to pay yourself millions of dollars a year while the private venture funding you raised sits in the bank, untouched while the government loan is siphoned off. Then after two or three years you declare bankruptcy, the initial goals of making thousands of units per year has vanished as the government loan runs dry. We’re not saying Faraday Future is doing any of this but it has been done before, essentially the venture capitalists don’t have anything to loose. Faraday Future is one of the new breed of Electric Vehicle manufactures, in November 2015 it declared that it would invest $1bn into building it’s first manufacturing facility in North Las Vegas. The company secured $250m dollars of US government energy loans. But reports are surfacing that the company is loosing staff and plans for a new 3-million-square-foot production plant has stalled. But not quite stalled. Faraday Future will instead make a significant downgrade and build a facility of around 650,000 square-feet because of financial problems. The Tesla rival initially planned to manufacture seven models but this has now been downsized to two. Production targets have also been pared back from 100,000 to 10,000 units per year. We haven’t followed Faraday Future too closely until now, but to go from 0 too 100,000 units per year production target is just picking out numbers from thin air. It takes car manufactures years to scale up production, for example Porsche used to make around 50,000 cars per year about 15 years ago. Today it makes over 200,000. How Faraday Future ever convinced anyone that it was possible to reach 100,000 and spend $1bn on an advanced production facility and seven models is beyond believe. But they convinced people. A car manufacture will spend $1bn creating a new model from scratch although this may form the basis for a multi-purpose platform shared between other models and brands. Faraday Future wants to compete with Tesla, but as we pointed out Tesla will face production quality issues not because they are inexperienced rather because they will try to produce to many cars too quickly. This has already transpired to be a reality for Tesla as demand outstrips supply. To meet this demand Tesla basically rushed through production to meet targets and quality is suffering as a result. Will Faraday Future have a future? No. It should have set realistic targets, what it is doing is spending tax payers money most probably on paying extravagant wages to its senior executives and this is why Faraday Future will fail.  Faraday-Future-Scam
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