Mysterious Chinese Billionaire targets Tesla

You may say that Chinese billionaire, Jia Yueting, has big dreams after it was announced that Faraday Future, the start-up company he created, announced the creation of a billion-dollar US Factory that will build electric cars starting in 2017. They will rival those made by our old friend, Elon Musk, over at Tesla Motors.

Former Tesla director, Nick Sampson, who is now Faraday’s Senior VP of Research and Development, said that Faraday plans to launch its first electric car within two years and then quickly follow on with two more models. Based in Gardena, California, the company already has more than 400 staff developing its first model. The USA was chosen to take advantage of American engineering and design knowledge. 

Nick Sampsons' Linkedin picture

Sampson said in a recent interview, “We will launch a single model and follow with a range of vehicles in a faster way than others have achieved…We’re looking at seven different vehicles.”

Faraday will probably seem like a bit of a Tesla old boys club, with the likes of Alan Cherry, the ex-Tesla HR manager, heading up HR at Faraday, and Dag Reckhorn as VP for Manufacturing, a similar position to the one he held over with Tesla. Of course the problem with electric cars is that, as of yet, no one has figured out how to make money from them. In fact, with the recent fall in oil prices, American consumers are once again in love with their large gas-thirsty SUV’s and pickups. Telsa has already racked up US$1.9 billion in losses since 2007.

Sampson is more confident and believes that Faraday can make money in a different way, specifically to offer autonomous driving and connectivity in its cars. He envisions a smartphone on wheels, that is familiar with its drivers and all their tech preferences. He may have a point. After all, Jia Yueting is founder and chairman of Leshi Television, a popular Chinese online video site, and Faraday’s strategy is to not just make money on the car, but also on subscriptions for connective services, apps and other infotainment accessed from the car, according to Sampson.

“Our business model is not based around moving a car out of the dealer,” Sampson explained. “We envision this like a smartphone. The revenue starts once you get the device in the owners’ hands. We’re looking at subscriptions and apps and other opportunities.”

The location of Faraday’s new factory has not been announced yet, although it is believed that they are looking seriously at Nevada and more particularly North Las Vegas. If this is the case, they may well be neighbours with their old boss, as currently Tesla is building the world’s largest Li-ion battery factory to the east of Reno. Governor Brian Sandoval signed off on tax breaks, worth as much as US$1.3 billion, for the plant into which Tesla is expected to invest US$10 billion over 15 years.

Some of their other neighbours would be doing something very different though. Of late, North Las Vegas has been enticing commercial marijuana growers and other businesses to a 2,000-acre industrial park, baiting them with easy access to freeways, power transmission lines, and corporate tax break. 

Is this the Faraday car? Looks like some of the boys might have been smoking their new neighbour’s products.