LeECO ELECTRIC VEHICLES
The Chinese Internet and entertainment company LeTV owned LeEco electric vehicles manufacturer invested $3Bln in its assembly line in Huzhou City, Zhejiang Province. The first phase is expected to be completed by 2017 and will produce 200,000 units per year. After completion of the second phase, the company will be able to produce 400,000 vehicles per year. LeEco holds investments in various electric vehicle companies which include Faraday Future, the Aston Martin RapidE development and the BAIC all electric subsidiary BJEV, the manufacturer of the ArcFox 7. BJEV, in turn, is rumored to have a shareholding in Atieva. The relationship with LeEco provides all these vehicles access to connect with the digital ecosystem, EcoLink, giving it an edge on the Internet Of the Vehicle (IOV) future. Although LeEco is compared to Alphabet, NetFlix, and Apple, it does not have the financial muscle of its peers, adding to which trading in its shares have been suspended which would hamper fundraising efforts. LeEco stated that it already owns 833 patents related to EV’s and autonomous vehicles.
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THE LeECO ELECTRIC CAR STRATEGY IN THE NEWS
2018 Week 33 - No mention of LeEco in new FF structure
One can’t be blamed for being confused when reading press announcements by Faraday Future and its shareholders the past week. A press release on the Faraday Future (FF) website dated August 16 states that the company does not have any plans to move its global headquarters to anywhere outside of California and goes further providing reasoning why it will not change. FF spawned from the Chinese online video service provider LeTV and its controversial founder Jia Yueting ran into financial trouble. The company was bailed out in June by Chinese property giant Evergrande Health Industry Group which acquired 45% in the company. The white night shareholder Evergrande announced this week that Evergrande Faraday Future Intelligent Vehicle (Guangdong) Co., Ltd which acquired a 401,000 square meter piece of land in Nansha District, Guangzhou will establish FFs operating HQ in China. The company aims to produce 5 million vehicles over the next ten years such as the FF91 and FF81 electric vehicles based around a connected intelligent mobility ecosystem. Evergrande Faraday Future stated that it would achieve its goal through the development of five R&D and production bases throughout China. Although the Chinese base is labeled as “Operational” HQ in the country a poisoned pill in the funding arrangement by Evergrande Health could see the global HQ shift to China. According to the agreement should FF founder Jia Yueting not be able to bring the first batch of FF91’s to market in Q1 2019 he loses his majority shareholding, giving control to Evergrande Health. At the end of July FF announced that it completed the first body of the FF91 at its Hanford California plant, ahead of its own timeline objectives. The company said that it expects to deliver its first vehicles in December 2018.
FF’s original shareholder LeTV confirmed this week that it does not have any knowledge of operations or shareholding in FF. All reference to LeAuto and LeEco disappeared from the dialogue of any of the parties involved over the last six months.
2017 Week 26 - LeAuto to get new lease on life
We have followed the Chinese “Netflix,” LeTVs, misadventures in the electric vehicle sector for the past year. LeTVs auto companies, Faraday Future in the USA and the LeEco in China, is well known for overpromising and underdelivering on its goals. The reason for the failure of the enterprises to make good on the hype created around it stems mostly from a cash crunch at the parent company, LeTV, due to it overextending itself in a wide range of projects. The founder of LeTV, Jia Yueting, had to personally jump in and save the two electric vehicles from faltering as groundbreaking of the Faraday Future ground to a halt while the launch of the FF91 at the CES 2017 flopped and the JV with Aston Martin was suspended. At the start of June, the Shenzhen Stock Exchange suspended the launch of the company’s RMB 2 billion bond which was supposed to provide cash flow to LeTV and its subsidiaries. This week Jia Yueting announced that LeTV would complete A-round financing by the end of the year to fund its vehicle projects housed under LeAuto. The funding will be used for mass production of electric vehicles. Jia Yeating stepped down recently as General Manager at LeTV and took a board position at LeAuto and FF Global. Faraday Future also clawed back some reputation this week as the FF91 prototype set a new production vehicle record at Pikes Peak.The FF91s time of 11 minutes 25.083 seconds record was 20 seconds faster than the previous record set by a modified Tesla Model S. Should the funding fails it will most probably be the end of the projects as LeTV has racked up large debts already resulting in large-scale layoffs and halting of projects.
2016 Week 52 - Groundbreaking of LeEco's Hangzhou electric vehicle plant
The controversial LeEco announced the groundbreaking of its plant in the city of Hangzhou, Zhejiang Province China. LeEco is entwined between Faraday Future and the LeSee electric vehicle manufactured by LeEco. Both companies were founded by Chinese businessman Jia Yueting. Both businesses are known for making bold statements and big ticket announcements just to be followed by press reports of cash flow and funding problems. The announcement comes at a time when Faraday Future is battling to break ground on its plant in Northern Los Angeles. The company could not even pay the $21 million deposit to Aecon despite being offered $300 million by the local authorities for building the assembly plant there. LeEco has also partnered with Aston Martin on the RapidE, where it will help with the development of the zero emission technology. Faraday Future is said to hold the patents to the technology, but recent reports state that the technology is in fact held by a separate company in the Cayman Islands, creating insecurity for investors and borrowers.
2016 Week 46 - Financial stress impacts construction of Vegas assembly plant
General speculation that some of the Chinese tech companies entering the electric vehicle space might run into financial trouble had its first high-profile casualty. Faraday Future, a LeEco company this week halted construction of its Las Vegas facility. LeEco CEO, Jia Yeuting, who invested $300m of his personal funds announced that the company is short of cash and that construction would be delayed to 2017. The company, however, was able to secure further funding commitments from 10 Chinese companies of around $600m. Investors included Hailan, a Chinese apparel firm who’s investment is a bid to support China’s auto industry.a
2016 Week 38 - Fundraising
LeEco the Chinese IT giant this week announced that it raised over $1bln mostly from local investors, up from the initial $500M for its all-electric supercar, the LeSEE. The Chinese investment community is very bullish on the technology in the country with the Government promoting the industry to allow for the sales of up to 5million EV’s per year by 2020.
2016 Week 33 - Assembly plant
LeEco, the Chinese automaker and financial backer of Los Angeles-based Faraday Future announced its plans to build a $1.8 Bln vehicle assembly plant in China, which will enable the company to produce around 4000,000 vehicles per year.
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