Electric car startup Faraday Future scrapped plans to build a new factory in Vallejo, California, the Los Angeles-based company confirmed in a statement given to Business Insider. The firm negotiated a preliminary agreement with Vallejo administration in mid-2016 but has now decided to drop the idea of building a vehicle manufacturing facility at the location due to the fact it's recommitting its resources towards commercializing its first electric car and building a manufacturing plant in Las Vegas, Nevada. Regardless, a Faraday Future spokesperson said the company will still consider Vallejo as a potential site for its future expansions but provided no specific time frame to accompany that statement.
The firm was reportedly given two extensions on its negotiations with the city as Vallejo officials apparently opted for a patient approach to the deal, but that strategy ultimately didn't amount to anything as Faraday Future's cash crunch and management departures led the company to deprioritize the project before finally scrapping it. The Los Angeles-based startup is now adamant to use its remaining resources to complete the development of the FF91, its first concept car that was heavily advertised at the latest iteration of Consumer Electronics Show (CES) in January. It remains to be seen whether the firm manages to realize that ambition seeing how the construction of its primary manufacturing plant in North Las Vegas still hasn't started and it's currently going through financial troubles that are apparently even preventing it from paying for promos it ordered for the FF91.
Faraday Future's prospects aren't helped by the fact that its main backer and LeEco CEO Jia Yueting is currently going through rough financial times as well. Following years of aggressive expansion, LeEco found itself strapped for cash in recent months and has been relying on external capital injections and liquidation of assets to keep its business afloat. While LeEco previously invested in electric vehicles and was supposed to be one of the main backers of Faraday Future's Las Vegas plant, its financial difficulties have put its sights elsewhere. Time will tell whether the Los Angeles-based company manages to navigate through these turbulent times, but an update on the situation is bound to follow shortly.