Faraday sees future in electric cars

A rendering of Faraday Future's proposed $1 billion manufacturing plant in North Las Vegas, Nevada. Jia Yueting, chairman and founder of LeTV, is one of Faraday's major backers. The project is still subject to legislative approval, according to Faraday. Provided To China Daily

A move from a California-based electric car manufacturer to locate a new $1 billion manufacturing plant outside of Las Vegas could signal the arrival of a new player in the electric car market.

But plenty of competition awaits Faraday Future, according to a pair of automotive industry analysts.

"You will see automotive companies - established and new ones - are getting ready to embrace the software- and technology-defined vehicle," said Thilo Koslowski, vice-president and practice leader of automotive and smart mobility at global market research firm Gartner Inc.

"But as technology is becoming more relevant, it is still crucial that companies get the traditional aspects of the vehicle right as well," Koslowski said in a Dec 16 phone interview with China Daily.

Tim Dunne, director of automotive industry analytics for California-based global market research firm JD Power and Associates, said the electric vehicle market is "still in its infancy".

But, "It is possible for a new kind of company to enter the market where others had existed," Dunne said. "Tesla provided a blueprint for that."

"If this new entity can bring something to the market or improve on what's already available, then I think there's an opportunity," Dunne said in a Dec 16 phone interview with China Daily. "Not having produced a vehicle or not having any brand identity, that's obviously a challenge but everyone has got to start somewhere."

With a $1 billion investment over the first 10 years, Faraday Future's project calls for the production of fully-electric vehicles that include "seamless connectivity to the outside world," the company said.

The 3 million-square-foot automobile manufacturing plant located at the Apex Industrial Park in North Las Vegas, Nevada, would feature full-scale production of electric vehicles, and give Faraday a chance to also explore developments in mobile applications and self-driving technology, Stacy Morris, a Faraday representative told the Los Angeles Times on Dec 10.

The project is expected to generate 4,500 on-site jobs and 9,000 more indirect jobs in the area.

Faraday made the announcement alongside Nevada state officials at a press conference on Dec 10.

The final decision to locate the plant in Nevada was swayed by a $335-million tax incentive package offered by the state governor's office, company officials told the Times. The electric carmaker had been considering sites in California, Georgia, Louisiana and Nevada.

On Dec 19, the Nevada Legislature wrapped a special session by passing a tax incentive package for Faraday. Nevada Gov Brian Sandoval called the legislature into special session on Dec 16 to approve an economic package that includes $175 million in tax abatements, plus $38 million in transferable tax credits.

Faraday Future, which maintains its headquarters in Gardena, California, about 20 miles south of Los Angeles, has nearly 500 employees. Faraday's team features a number of employees and executives who have worked at other luxury car companies, including: Tesla, BMW, Porsche and Volvo.

Faraday is backed in part by Jia Yueting, the chairman and founder of Leshi Internet Information & Technology, a major Chinese media company also known as LeTV.

Jia told Nevada lawmakers in a recent letter that the company looks to revolutionize the auto industry with the creation of an "integrated, intelligent mobility system," the Times reported.

Koslowski said: "The idea that you connect consumers or enable them to be connected while they're driving is increasingly a need that consumers have. That's where I see an opportunity for companies to come up with better solutions."

Dunne said there are more global carmakers focusing on the electric and hybrid vehicle market in recent years, including industry stalwarts like Ford Inc and the General Motors Co.

"There's definitely a lot of interest being driven by policies that are not in effect right now, but will come into effect in the next five to 10 years," Dunne told China Daily. "In the US, Europe and China, the governments are looking at improving fuel economy while lowering exhaust emissions."

Ford announced on Dec 10 that it would invest $4.5 billion into "electrified vehicle solutions by 2020," according to a company press release. In September 2014, Tesla announced plans to build a $5 billion battery factory outside of Reno, Nevada.

Atieva, another up-and-coming electric vehicle producer in California, has announced financial backing from the Beijing Automotive Industry Corp (BAIC), a Chinese state-owned carmaker, a Dec 16 report from autoblog.com said.

The California-based company is building what it calls "a breakthrough electric car," according to its website. A former vice-president at Tesla founded the company and its employee ranks are filled with former Tesla employees.

The terms of BAIC's investment were not disclosed, but the Chinese firm will become Atieva's largest shareholder.

On the same day, Chinese electric car company NextEV announced in a press statement that Cisco's former chief strategy officer Padmasree Warrior would become US CEO.

NextEV, which is working on smart, high-performance electric vehicles, maintains its headquarters in Shanghai. But the company also has an 85,000 square-foot research facility in San Jose, California, as well as design centers in Beijing, Hong Kong, London and Munich.

Kowslowski said: “At the end of the day, the success for any of these companies will be based on their ability to produce a compelling product. It’s not just about understanding technology. So there’s still other aspects that need to be solved, and the current environment is emphasizing the opportunity rather than threatening it.”

jackfreifelder@chinadailyusa.com