Following on news of cash flow problems at LeEco, and news that construction work on Faraday Future’s $1 billion facility in Nevada had ceased due to being behind on payments to construction firm AECOM, LeEco has secured $600 million in new funding.
More specifically, the parent firm of LeEco, LeShi, raised the new funding through over 10 different China-based firms — these investors haven’t been named, but are reportedly all formerly classmates of Jia Yueting from the Beijing-based Cheung Kong Graduate School of Business.
Commenting on the recent leaked company memo from Yueting, TechCrunch noted that: “The letter was assumed by many to mean that LeEco’s US operations and the electric car project that it is working on with Faraday Future are in jeopardy. However, speaking at the TechCrunch Beijing event last week, LeEco’s North American operations lead Brian Hui denied that his business would be impacted. He also stressed that the development of the car is the firm’s ‘highest priority’ and will continue. Hui did admit that LeEco is entering a new phase of its business which, among other things, will mean fewer large scale investments like the recent $2 billion acquisition of Vizio.”
Presumably, the $600 million in new funding is related directly to this “highest priority” Faraday Future electric vehicle development plan. After all, if they can’t finish the facility that the firm’s vehicles are supposed to be built at, then how can they successfully bring a compelling electric vehicle to market?
Hopefully this news is confirmation that the firm and its execs have doubled down and are making more financially prudent decisions than previously.
$300 million of the new funding will arrive before the end of November, Reuters has reported — with it all going to Faraday Future and the e-commerce hardware sales platform LeMall, apparently.