Faraday Future is an electric car making company located in Gardena, California which launched their FF 91 electric car during a news conference in at CES International in Las Vegas in January. For this matter, they planned to invest more than $1 billion in the development of a car manufacturing plant in South Nevada after the announcement. But it seems that the company is hesitant about any further investment in the development of the plan due to high cost and have planned to stop the investment and look for a ready-made plant in which they can continue their production of the existing car model. According to Faraday Future’s Chief Financial Officer Stefan Krause, the company has made changes in their business strategy and hence they took the decision to postpone their current plan.
Earlier they announced that the stoppage would be just on a temporary basis and the production would start as per their projected deadline in 2018. Karl Brauer, who is an executive publisher at Autotrader and Kelley Blue Book said that he find it very difficult to understand the current business strategy of this auto company because at one time ti was a very aggressive and fast moving organization in investing funds and strategizing things to achieve their projected and announced goals and now they have suddenly they have transformed their strategies and still project to reach their announced goals in stipulated time frame. This strategic decision is not only based on the current conditions in the organization but involves proper analysis of the current market conditions and potential demands of their product in future. Tesla and Faraday Future are close competitors since they deal in the same range of electric car models and have similar external factors hampering their business.
Jia Yueting suffered a huge loss when his assets were frozen by the Shanghai court against non-payment of debts for a long time. This shattered the plans of Faraday Future since Jia Yueting is one of the biggest investor and backer for the organization. But the company claimed that their decision is not based on this condition and they have some other strategic plans which led to this decision to stop investments in the development of the plant. In fact, even Jia Yueting also confirmed that they would still back up the electric car manufacturing company. According to the experts, the electric car sector is currently going through a rough patch and even Tesla didn’t manage to generate expected revenues after selling sufficient cars in the US market.