Faraday’s Future begins with $1bn EV plant in Nevada

Tesla Motors’ mysterious rival to come out of the shadows in 2016, but what does this mean for lithium-ion batteries at a time when the Gigafactory is set for launch //

31 December 2015 //

This article is taken from Benchmark Magazine, a quarertly publication as part of a Benchmark Membership. To subscribe contact info@benchmarkminerals.com 

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Faraday Future is a name is yet to have much impact in the electric vehicle (EV) arena.

The California-based company has released little information about its plans to design and manufacture electric and autonomous vehicles in Nevada except for the promise that it will be an auto industry game-changer.

Secrecy itself has been the loudest noise Faraday Future has made to date.

If it sounds familiar, you are forgiven.

Faraday Future is being specifically designed to compete with Tesla Motors and is backed by its very own billionaire, Jia Yeuting from China.

Yeuting has a net worth of nearly $8bn and rose from 78th to 17th in the Forbes China Rich List in the last 12 months. At 42, the billionaire is seeking to emulate his compatriot at Tesla, Elon Musk.

Not only are the plans to employ 4,500 on one site north of Las Vegas grand enough to be from the Tesla playbook, of the five key staff members, four are from Tesla and one is from BMW. Therefore, it is unsurprising that design and marketing have been its strongest assets to date.

The company is aiming to produce a range of full EVs by 2017 but will focus on connectivity as a major selling point.

“We will launch with fully electric vehicles that will offer smart and seamless connectivity to the outside world,” the company explained.

“Our team [will take] a user centric, technology first approach to vehicle design with the ultimate aim of connecting the automotive experience to the rest of your life,” it added.

It is yet another example of technology and automobiles converging, two multi-billion dollar industries that are set to cause great disruption in their respective sectors.

And it has led some to believe that Faraday Future is looking to beat Apple to a similar EV strategy with expectations that the electronics manufacturer will be launching its own full connected vehicle in the next two years.

Treating a vehicle like a smartphone is something that Faraday Future believes it can get the edge on its competitors.

“When you buy a phone you get the hardware for free, you can use it for whatever you want, and it can kind of do everything,” explained Page Beermann, head of exterior design at the company.

“So what if you had access to a range of products where you can buy one car but you’re actually accessing five different kinds of cars?” Beermann said.

This gives an insight into the direction the start-up company is heading. While Tesla has focused on making EVs desirable through design and performance, Faraday Future wants to take this one step further by making its cars fully integrated with the users’ day to day technology.

It also raises the question whether the company would be looking at a car sharing scheme of sorts. While not a new idea, EV manufacturers to date have shied away from any form of sharing of intellectual property such as chargers and battery management technology.

FF's proposed location top left, close to the Las Vegas Strip / Credit: Faraday Future
FF’s proposed location, top right, close to the Las Vegas Strip / Credit: Faraday Future

Billion dollar plant, Gigafactory to launch

The company has already started construction on a $1bn “state-of-the-art” EV manufacturing facility in north Las Vegas, Nevada, the same US state where Tesla have built their mega battery plant, the Gigafatory, and the only lithium producing region in North America.

It is a move that could shift the North American auto industry’s power away from Detroit.

“It’s making Nevada the centre of gravity for the new auto industry,” a consulting firm involved in the process explained to The Review Journal.

The plant will be located at the Apex Industrial Park, only 15 minutes from downtown Las Vegas. Interestingly, it is also the same industrial park where Elon Musk’s Hyperloop test facility will be based.

In terms of sheer size, Faraday’s plant will be about 25% smaller than the Phase 1 Gigafactory, while it is only expecting to manufacturer vehicles there and not lithium ion batteries.

The company has also received tax incentives of $315m over a 15-year period to locate at the site, dependent on the final investment sum.

“We’re proud of our mining, we’re proud of our gaming, we’re proud of all those anchor tenants that we’ve had in our state,” explained state governor Brian Sandoval.

“But the world’s changing. And I know that you agree with me that we’re not going to let it pass us by.”

Meanwhile in northern Nevada, some 700km away, Tesla is on schedule to launch its Gigafactory just outside of Reno.

The company is not only on track with a Q1 launch of the world’s biggest lithium-ion battery plant, but it has recently more than doubled its land holdings on site from 10m square feet to 24m square feet, sparking rumours it may be planning to build a second Gigafactory at the same location.

Recent images taken at the site show welcome reception signs saying “Gigafactory 1” leaving the assumption that more than one will be built sooner rather than later.

Credit: James Lipmann / Twitter
Credit: James Lipmann / Twitter

With the number of EVs produced worldwide reaching record levels in 2015 together with major plans for this output to grow at an even more rapid rate between now and 2020, taking battery production into its own hands is deemed a major short term risk but a wise move by Tesla.

“It’s hard to convince people from consumer industries that you’re going to make 15 times as many cars as you’re currently making. That sounds pretty implausible. We just had to say we’re going to do it [make our own batteries], and you’re either on the ride or you’re not.” Elon Musk explained in an interview with Fast Company.

And with new producers like Faraday Future entering the space, let alone the number of vehicles China is producing today, lithium ion battery demand could be significantly higher than even the most bullish of estimates.

Analysing Faraday Future’s secretive plans, it is a fair estimate to assume the company will have at least the capacity to produce 100,000 full EVs at the Las Vegas plant each with a battery capacity in excess of 50kWh per vehicle.

All eyes will be on the company at the CES2016 show in January to see what plants and battery technologies the company reveals.

What the company’s entry into the auto market does prove is that money is flowing into the sector from outside sources. No longer is the auto sector funding its most innovative projects.

Talent – mainly the world’s top young engineers and designers – are now gravitating towards the auto sector, something that was not the case only three years ago.

While the company is some way off of producing its first EV, it claims the money and talent is there.

In the last 12 months it has grown from 50 people to 400 and is hiring at a rate of 50 a month.

Faraday Future aims to have its first EV on the road by 2017 adding yet further battery demand to an already squeezed market in this timeframe.

The world will be watching whether the company can reach its ambitious goals and whether there will be enough batteries available to make them happen.

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Learn more about the EV and battery supply chain at Benchmark’s events: 

> Graphite Supply Chain 2016, 13-15 November 2016, Newport Beach, California 

> Benchmark | World Tour 2016, September-October 2016 

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