When you think of competing industry-leading brands, some pairings that come to mind might be Coca-Cola and Pepsi, Uber and Lyft, McDonald’s and Burger King, or FedEx and UPS. But who rivals Tesla, one of the top global automotive brands? Maybe Google, Ford, and Apple come to mind. But Tesla vs. Faraday Future? Ever heard of that battle?
Last year we introduced our readers to Faraday Future, an electric vehicle startup that was – and still is, for the most part – shrouded in mystery and hype. But despite reportedly recruiting 750 high-ranking auto industry vets and innovators from the likes of Boeing, NASA, Apple, BMW, and even Tesla itself, and despite an investment in the billions from China’s Leshi Internet Information and Technology Co (LeTV, known as the “Netflix of China”), the potential (and expected) Tesla rival has yet to build any of its promised vehicles or even complete its initial production factory. And just this week, the company once known as a “Tesla-killer” announced it’s canceling plans to build an assembly factory in California.
Though Tesla has been plagued by its own share of problems – lawsuits, potential cover-ups, and high-profile crashes with its autopilot engaged – the failure (as of yet) for any other company to come close to its innovative and market-disrupting brand highlight the rarified air the carmaker breathes.
Last year Faraday Future was expected to be a major electric vehicle player, but now it seems that’s all changed and catching up to (never mind surpassing) Tesla might be out of reach.
Tesla vs. Faraday Future: Model X vs. FF 91
In 2015, Faraday Future made public its plans to produce electric vehicles of both performance and style to rival Tesla’s Model X. Faraday Future unveiled its prototype during CES in 2016, but the debut raised more questions than it answered, writes Business Insider, especially when it was discovered that the vehicle was inoperable.
Faraday hasn’t set a price for the FF 91 EV yet, but the CEO of their financial backer, Jia Yueting, did say their cars would cost less than $242,000, writes Car Buzz. How much less, they didn’t say.
When Faraday Future returned to CES 2017, the team again missed its chance to prove themselves: their car didn’t work during a live demonstration of its automatic valet feature, reports Mashable, and they spent their presentation time on the virtues of artificial intelligence and other “tech jargon.” Missing from the presentation was specific talk of what actual changes their planned vehicle will make in the economy and in communities.
What’s Happening with Faraday Future?
Though the company has always been secretive about its plans and operations, the past months have seen lawsuits, executive shake-ups, and signs that cashflow is lacking within Faraday Future, all of which points to problems that might make the company unsustainable.
The “$1 Billion Factory”
Originally, Faraday Future planned a Las Vegas-adjacent factory with a price tag over $1 billion, but in early February of this year, Fortune reported that factory plans had been scaled back. Instead of building a 3 million square foot factory, Faraday Future reportedly told the city of North Las Vegas that they would instead build a 650,000 square foot factory, which would support the production of no more than 10,000 cars a year. Faraday Future denied factory scale-backs, instead claiming a two-part building plan in order to bring its first vehicle to the market faster, but people watching the company remain skeptical.
Cashflow and Leadership Concerns
Though nothing is confirmed, factory scale-backs could be the result of cashflow problems, problems that could have contributed to the flight of several executives in the last year. Faraday Future’s Global CEO departed just before CES this year, writes Business Insider, and current and former insiders “describe millions of dollars in unpaid bills, and a chaotic corporate structure between Faraday’s U.S. and Chinese operations.” A source told Business Insider that Faraday Future could not survive past May of this year if they didn’t bring in new investors.
Faraday Future is also on the defensive end of unusual (and some would say embarrassing) lawsuits that might belie the company’s assertions of success. A former broker who negotiated Faraday Future’s domain name is suing the company for $210,000 over non-payment, reports Jalopnik. The relatively low figure and the fact that Faraday hasn’t simply paid up is a pretty obvious signal of financial difficulties, Jalopnik argues, though any financial troubles are unconfirmed by the company. Faraday Future was also sued in January for $1.8 million by a special effects company for non-payment over a graphic presentation.
To make matters even more complicated, some reports assert that despite claiming to have over 64,000 reservations for their cars, there’s no way to know how many people are serious about buying, writes Jalopnik. People can make fake reservations easily without paying and sources told Business Insider that only 60 people had paid the $5,000 deposit.
Can Anyone Catch Tesla?
Tesla planned to change the auto industry, and with its more affordable Model 3, which will start at $35,000, planned for a late 2017 release, they may just do it – if they follow through.
“It’s no exaggeration to say the success or failure of the Model 3 will mark a key event in automotive history,” writes The Seattle Times.
Whether or not Tesla can successfully mass produce the Model 3 and actually make electric vehicles mainstream remains to be seen. However, though they’ve had production delays in the past, Tesla has already proven it can actually make and assemble cars, something other high-tech electric vehicle companies like Faraday Future have yet to accomplish.
When Faraday Future went public, the company announced plans to totally transform the auto industry, and perhaps it still will, but the trouble it’s had along the way make it all look increasingly like a long shot. Because of Faraday Future’s secrecy, it’s hard to know precisely what’s going wrong – or right. Without explicit company announcements or operations transparency, there’s little indication of progress for the public to get excited about.
But maybe we’re wrong. Maybe Faraday Future is simply misdirecting, preparing for a big reveal. What do you think?