Nevada asks collaterals from Faraday Future image

Faraday Future’s investment plans are daring, but the state is not quite convinced about the financial power of the recently established electric maker, Automotive News reports.

The newly formed California-based company stormed the industry by announcing back in November it would invest 1 billion dollars in a plant in the US, set to produce long-range electric cars by 2017. One month later, the electric-vehicle startup backed by Chinese billionaire Jia Yueting said it chose Nevada over three other US states, after extensive negotiations with the state’s economic development team. Following the deal, Neva approved as much as 215 million dollars in tax incentives and credits for the plant, which would ultimately employ as many as 4,500 people. The company has started preparing the land at the North Las Vegas site and expects to start building the facility in April. However, the state wants to be sure that Faraday has the promised money for such a large investment and it will not give those subsides until the electric maker can prove its full liquidity or at least some of the cash. The state is asking Faraday to put up as much as 75 million dollars as collateral before Nevada begins to issue bonds for infrastructure projects for the site, according to Automotive News.

“My responsibility is to the Nevada taxpayer,” said state Treasurer Dan Schwartz, who supported invoking the collateral requirement. “I’m personally and the office is very much in favor of economic development, but what we don’t want to happen is to issue bonds that won’t be paid.” Nevada has also taken other steps to protect its investment, including a trust fund to recover tax abatements until Faraday meets its 1-billion-dollar promise.

Via Automotive News