New Lease on Life, or Delaying the End? Faraday Future's Dad Drops Off Some Cash

After a myriad of financial troubles and irresponsible corporate dealings, we assumed Faraday Future’s end was near. However, its spectral parent company now claims it has convinced more than ten Chinese companies to invest $600 million into its automotive division.

While the future of Faraday can not be considered even close to bright, the brand could theoretically hobble onward using this financial stimulus as a crutch.

Reuters reports that Leshi Holdings has secured commitments of $600 million to support LeEco, the Chinese technology and automotive unit pulling Faraday’s strings. Half of that hefty sum is to be delivered immediately and invested directly into the auto business and LeEco Global.

Earlier this month, company founder and CEO Jia Yueting announced that LeEco was confronted with a major cash shortage stemming from its rapid and irresponsible expansion into other industries. Jia said it was necessary to take drastic cost-cutting measures and scale back LeEco’s automotive ambitions or risk being forced to abandon them entirely.

This incredible mass of capital and support could not have come at a better time. Zhou Jianping, chairman of Hailan Group, claims his company’s investment in LeEco is primarily to bolster China’s indigenous automotive industry.

However, LeEco and Faraday Future have only managed to deliver promises thus far. While Faraday assures us it will have a production-ready electric vehicle at the CES technology show this January, its last offering was a ludicrous supercar EV concept. Similarly, LeEco has been showcasing the LeSee — an autonomous vehicle with no clear idea of how it might work or be sold. Jia even went to far as to suggest that LeEco cars might eventually be free, using a business model that makes money on the content and other services sold through its autonomous connected cars.

What was not established, however, is how that business model might work. It’s also unclear how much of this $600 million will go toward finishing the construction of Faraday Future’s billion-dollar factory in Nevada. Work on the plant had been stalled due to the company owing millions in back pay to the contractor.

Richard Windsor, an independent technology analyst, told Reuters that he fully expects the financial pressures to eventually force LeEco out of the automotive industry. “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.

[Image: LeEco]