Faraday Future to push forward with EV project in China, will enlist Geely's help -sources

Embattled startup Faraday Future will push ahead with plans to produce some of its fully electric vehicles in China by opening a plant in the country and enlisting China's Geely to provide contract manufacturing services, sources said.

By Yilei Sun and Brenda Goh

SHANGHAI, Jan 25 (Reuters) - Embattled startup Faraday Future will push ahead with plans to produce some of its fully electric vehicles in China by opening a plant in the country and enlisting China's Geely to provide contract manufacturing services, sources said.

The Los Angeles-based startup intends to set up a new base in China as part of those plans, the three sources familiar with the matter said, declining to be named as Faraday Future's plans have not been made public.

The company told prospective investors this month it plans to locate the plant in a "tier one Chinese city" and envisions that it will have the capacity to make over 100,000 vehicles a year in its initial phase, one of the sources said, adding Faraday Future is considering to add a research centre in the same city.

Zhejiang Geely Holding Group GEELY.UL is in talks to provide contract manufacturing services to Faraday Future in China for its mass-market model, two of the sources said. Geely will also help improve the model's engineering and add smart car technologies including autonomous driving functions, they said.

The sources cautioned Faraday Future's plan was not fully finalised and is subject to change. Geely and Faraday Future declined to comment.

Faraday Future has had a whirlwind journey since it was founded in 2014 by Chinese businessman Jia Yueting, who was touted by Chinese media as China's answer to Tesla Inc's TSLA.O Elon Musk after describing his auto-making ambitions.

The firm first announced in 2017 that it would build the FF 91, its fully electric vehicle, with the intention to launch it in 2019. However, it has delayed its production plans multiple times due to a series of financing issues.

Jia, who also founded entertainment company Leshi Internet, stepped down as CEO of Faraday Future in 2019 and finalised his personal bankruptcy filing in June.

The company already has a plant in Hanford, California. In 2019, it said it wanted to raise $850 million to launch the FF 91, down from an original estimate of $2 billion.

Earlier this month, Faraday Future said it was still raising money and would start making FF 91 vehicles in around a year's time once they had reached their funding target.

A Faraday Future spokesman reaffirmed the fund raising and manufacturing plan they announced this month in a statement to Reuters on Monday.

Geely, which owns Volvo Cars and a 9.7% stake in Daimler AG DAIGn.DE, said earlier this month that it would let China's search engine giant Baidu Inc BIDU.O to develop cars on its EV-focused platform.

It also signed an agreement with Foxconn 2317.TW to provide contract manufacturing and technology consultancy services to other automakers.

(Reporting by Yilei Sun and Brenda Goh; Editing by Ana Nicolaci da Costa)

((Y.Sun@thomsonreuters.com; +86 10 66271262; Reuters Messaging: y.sun.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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