Faraday Future owes a $21 million deposit to an escrow account to cover costs for its Nevada factory, Automotive News first reported.
Construction company AECOM wrote in an Oct. 10 letter obtained by Automotive News that Faraday Future is behind on a $21 million payment that was due in September to cover material costs and subcontractor work on the Nevada factory.
The letter then gave Faraday Future 10 days to “fully fund” the escrow account or risk the suspension of work until “the funding issue is resolved.”
Faraday Future confirmed there was an overdue payment to Business Insider.
“The business relationship between Faraday Future and AECOM is strong and we remain committed to building our factory of the future in North Las Vegas,” a Faraday Future spokesperson wrote in an email to Business Insider. “Both organizations are working diligently to resolve the overdue payment, we are continuing to make progress at the site and a work stop order will not be issued.”
The statement implies Faraday Future still owes the $21 million deposit and did not meet the extended deadline given by AECOM in the letter, which asked the start-up to make the payment by October 20 or risk a work stoppage.
Faraday Future did not elaborate beyond the initial statement given to Business Insider. AECOM deferred comment to Faraday Future.
The Oct. 10 letter notes that Faraday Future owes a separate $25.3 million payment that’s due in October, as well as another $11.8 million due in November.
- Rob Ludacer
“AECOM management views these deposits as a critical metric to project financial security and maintaining confidence and credibility with our project subcontractors and suppliers,” the letter reads, according to Automotive News.
Faraday Future held a ceremonial groundbreaking for the planned 900-acre, $1 billion factory in Nevada in April. Shortly after the event, the start-up told Business Insider that it finalized deals to buy that land, but declined to reveal how much it paid.
Chinese internet company LeEco, which is building its own electric car, is a strategic partner of Faraday Future. LeEco’s CEO Jia Yueting is a personal investor in Faraday Future.
This isn’t the first time questions have come up regarding whether Faraday Future can finance construction of its Nevada factory.
Dan Schwartz, Nevada’s treasurer, told Bloomberg in July that he was skeptical Yueting could secure the financing necessary for the factory, stating he wanted more transparency before signing off on state bonds for $120 million of infrastructure improvements. Nevada has granted $215 million in tax credits for the factory.
Faraday Future will show its first production car at the Consumer Electronics Show in January. Faraday Future generated a lot of hype for a car reveal ahead of the 2016 Consumer Electronics Show, but people were disappointed to only see a concept car.