But the relatively untapped market for Tesla, the Silicon Valley heavyweight founded by CEO Elon Musk, is under pressure. Faraday Future a US-based and Chinese-backed company focusing on electric vehicle development, has gained substantial momentum since its launch in 2014. Although Faraday likely hopes to stay out of Tesla’s radar while in its initial stages, some information has been shared with the public.
Here’s what we know. The brains behind Faraday’s project are mostly from Tesla’s former management. Faraday’s five leadership thinkers – four of which are former Tesla employees – are backed by Chinese billionaire Jia Yueting. And this backing is huge; Yueting plans to pour billions into the company. Yueting, owner of Leshi TV, China’s version of Netflix, provides Faraday with a substantial cushion given his net worth of over $7 billion. According to Don Reisinger of Fortune, Faraday plans to spend over $1 billion on a manufacturing facility in North Las Vegas to start things off.
What makes matters even more interesting for Faraday are the tax deductions it has received from the state of Nevada. Motivated by the creation of jobs and the potential for economic development, Nevada has granted over $335 million USD to Faraday with the high hopes that the over 4,500 direct jobs created by the investment will yield over $85 billion USD in direct economic impact over the next 20 years. This long-term hope is by no means conservative, but in comparison to Tesla, these numbers make sense. Tesla began construction on a factory in Sparks, Nevada and welcomed a $1.3 billion incentive bundle from the state. Nevada expects Tesla’s manufacturing plant to yield up to $96.9 billion over the next 20 years. According to the Nevada Governor’s Office of Economic Development, the state plans to have a 26% boost in state GDP because of Tesla alone – no wonder they lured Faraday with the same incentives. Jonas Peterson, the chief executive of the Las Vegas Global Economic Alliance, remarked on economic incentives and tax breaks for Faraday by saying that “[t]he truth is we got a heckuva deal.”
But Yueting’s massive investment of billions is rather odd given that the company has yet to sell any vehicles and has only 500 employees. What Yueting’s decision reflects, however, is a strong sense of confidence in the Faraday leadership team’s potential going forward. The company plans to release seven vehicle models over the next few years. In addition to these releases, the company plans to grow substantially. Faraday will provide over 4,500 jobs through their Nevada manufacturing site, and these employees will earn an average wage of over $22 an hour. This, in turn, will present over 9,000 indirect community jobs that will support Faraday’s manufacturing center. Given Tesla’s public offering price of $17 in 2010 that jumped to over $275 in 2015 and projections for Faraday to yield over $85 billion in direct economic impact over the next 20 years, Yueting’s decision and confidence make sense.
To shock the public, Faraday released their new, sleek FFZero1 model that boasts 1,000 horsepower and the ability to go from 0-60 mph in 3 seconds. But it isn’t just the technology behind these cars that will be so revolutionary for Faraday. What will make Faraday stand apart from its competitors are its novel manufacturing methods.
Faraday Future has designed a Variable Platform Architecture (VPA), a modular engineering system optimized for electric vehicles. According to Faraday’s leadership team, this modular, Lego-like assembly will “enable Faraday Future to minimize production costs, deliver exceptional quality and safety, dramatically increase its speed to market, and could easily support a range of vehicle types and sizes.” This is the factor, if executed according to plan, that will likely push Faraday beyond competitors like Tesla.
Simply put, Richard Kim, Faraday’s head of design, explained that Faraday will be “something cool. Something bold.” Kim further elaborated that he wants to improve the user experience of driving – which in more black and white terms suggests that they are developing a self-driving “autonomous car.” Faraday’s director of communication recently stated that the company hopes to “help further define the driverless world….As much of an automaker, we are a technology company as well.”
Faraday Future plans to release its first fully electric vehicle some time before 2017 and plans to unveil a series of vehicles thereafter. While its current model, the FFZero1 is a luxury vehicle, many speculate that Faraday’s other models will not be so expensive. A cost estimate for the FFZero1 has not yet been released, but many speculate that the cheaper cars that Faraday will soon release will hover around $58,000 USD. In a recent report from the International Energy Agency (IEA), the report noted that over the next ten years, investment in energy efficient passenger vehicles will offer the largest market opportunity for energy efficiency deployment. To add, investment in these environmentally friendly vehicles will represent over 60% of the efforts directed toward energy-efficient technologies aimed toward lowering greenhouse levels in the atmosphere. The market craves a cheaper alternative with energy efficient capabilities – Faraday could potentially deliver.
Regardless of the company’s internal gains, the state of Nevada will be reaping the benefits from Faraday’s production. Economists speculate that Faraday’s production will boost Nevada’s exports with over 95% of Faraday’s market expected to be outside of the state. In addition, starting in 2018, Faraday will offer $1 million a year for six years to the state’s education system – this number is not enormous but is a warming gesture regardless.
Faraday the potential for a remarkable future ahead of them given their well-structured management and strong cash foundation. The company’s plans are still elusive, but their hints have been absorbing. Aside from the vehicle, its manufacturing plans will be state-of-the-art, and its technology for anonymous driving would greatly decrease driving-related accidents. Faraday Future is pushing forward with the clean energy initiative in bold but secretive fashion. As Nick Sampson, Faraday’s senior vice president of engineering remarked, “Our mystery is obviously something that has become a hallmark.” In order for Faraday to out-perform Tesla, this hallmark impression has to transition away from mysterious words and toward revolutionary action. Clean energy transportation is evolving, and Faraday can lead the charge.