Even billionaires have it tough these days, as Chinese billionaire Jia Yueting, the man behind technology company, LeEco, is learning. Jia has admitted that rapid expansion of his company has put him in a cash-strapped position. The LeEco founder is also behind Faraday Future, the electric car project which wants to take on Tesla.
Since it revealed its plans to invest US$ 1.8 billion in a production facility in the US and unveiled the 1,000 hp FFZER01 concept earlier this year, Faraday Future has sponsored the Formula E e-Prix in Long Beach and the Dragon Racing team, hired Marco Matiacci, an automotive industry veteran, and increased its staff headcount to 1,000.
It has also been testing an electric crossover that is touted to be the Tesla Model X challenger and has also received an autonomous vehicle testing permit from the California Department of Motor Vehicles.
But with the founder announcing that cash is rapidly diminishing, it throws a lot of doubt in the air to the long-term sustainability of the Faraday Future to see its electric crossover get to the production line.
LeEco is also in the business of smartphones, electric bicycles and television, and strangely enough, had also unveiled its own electric vehicle called LeSEE, independent of Faraday Future. LeEco is also said to be in collaboration with Aston Martin to produce the RapidE electric car. The relationship between the electric car projects of Faraday Future and LeEco however, is still unclear.
But Jia has announced to his employees in a memo that he will cut his annual pay to 1 Yuan and slow the company’s expansion rate to a more manageable pace. How effective this move is remains to be seen but what’s definite is the company(ies) need a lot more cash, a lot more speed (to production) and a bit of luck.