CARSON CITY, Nev. (AP) — Chinese-backed electric carmaker Faraday Future plans to build a $1 billion manufacturing plant in North Las Vegas, according to a letter the company sent Nevada officials Wednesday.
The upstart, California-based automaker chose Nevada over three other states and after extensive negotiations with Nevada’s economic development team. Its tentative agreement to build the factory is contingent upon the state authorizing major tax incentives.
“I’m excited about the opportunity and I hope it works out,” said Republican Assembly Majority Leader Paul Anderson, who will need to rally legislative support for the deal. “I look forward to working with people across the board to see if we can get these jobs created.”
The letter to Nevada lawmakers, obtained by The Associated Press, is signed by Jia Yueting (ZHAW’ YOO’-weh-ting), a Chinese billionaire investor who styles himself after Apple’s late Steve Jobs and signed the letter in his capacity as founder and CEO of the holding company LeTV. Faraday hopes to bring a vehicle to market as early as 2017, but has yet to unveil a concept car.
Republican Gov. Brian Sandoval and his top economic development officer are scheduled to attend a news conference in Las Vegas on Thursday that’s expected to include a formal announcement of an agreement to bring the plant to North Las Vegas. Tax incentives to seal the deal would need authorization from Nevada lawmakers, who approved a $1.3 billion incentive package in a special session last year to secure electric carmaker Tesla Motors’ massive battery factory outside of Reno.
Sandoval, who met with Faraday representatives in China this fall as part of a year of negotiations, would need to summon lawmakers to Carson City for a special session to finalize the agreement.
Faraday has offered few details on its product so far, but has spoken in broad terms about its vision to transform transportation and said it has a diverse funding strategy to bring it to life.
“We plan to revolutionize the automobile industry by creating an integrated, intelligent mobility system that protects the earth and improves the living environment of mankind,” Jia Yueting wrote.
AP Photo/Nick Ut
One automotive industry analyst noted Wednesday that Faraday was starting behind Tesla and traditional auto makers that are already developing technology to provide vehicle Internet access and over-the-air updates to electronic controls.
“I’m not saying they can’t succeed, but they’re not going to be first,” said Stephanie Brinley, senior analyst with IHS Automotive in Southfield, Michigan.
Brinley said traditional companies are probably already considering what Faraday Future calls unique solutions.
“The challenge they’ll have as a startup is that it’s been done before, and they’ll be coming to market late,” she said.
The startup of about 500 employees has poached executive talent from electric carmaker Tesla and also draws its name from a luminary scientist — Michael Faraday — whose discoveries in the early 1800s laid the groundwork for the modern electric motor.
Nevada topped finalists California, Georgia and Louisiana in the race to land the 2.5 million square foot plant. It’s expected to sit on 600 acres in North Las Vegas’s Apex Industrial Park and bring 4,500 jobs to Nevada.
Screenshot via Faraday Future
The project would represent a boon for North Las Vegas, a city of about 220,000 residents that boomed as the nation’s fastest-growing city in the early 2000s and nearly busted when the recession hit and pushed it close to insolvency.
It also comes as Nevada, the state hardest-hit by the housing crisis, attempts to diversify its casino-heavy economy by attracting high-tech companies. In addition to clearing the way for Tesla, state officials have awarded hundreds of millions of dollars in incentives to encourage data centers to build and expand in the state.
Economics professor Edward Leamer, director of the Anderson Forecast at the University of California, Los Angeles, said an upstart company might find it hard to sell enough vehicles to break even.
“It could be tough going,” he said. “That whole electric vehicle marketplace is tough, with oil prices low.”
The Faraday Future news came a day after another Southern California company working on a futuristic transportation project, Hyperloop Technologies, announced plans to expand to the same industrial park. The firm, which is trying to develop a system that would propel passengers and cargo through nearly airless tubes at the speed of sound, said it will build a test track and conduct early-phase testing at the park.
Hyperloop officials, who haven’t decided on a location for a larger, second-phase test track, said they chose Nevada because the state was able to move quickly to approve the project.
Source Business Insuder