If Jia Yueting can't be the next Musk, will Xu Jiayin become the next Sun Hongbin?
When Xu Jiayin first visited Jia Yueting's Faraday Future (hereinafter referred to as 'FF') in Los Angeles, he probably had an answer.
FF released a message saying that on July 13th, US local time, Xu Jiayin, chairman of the board of directors of Evergrande Group, inspected FF, and his colleagues also included senior executives such as Xia Haijun, president and FF chairman of Evergrande Group, and Peng Jianjun, vice president of Evergrande Group. FF Founder Global CEO Jia Yueting, FF Global R&D Senior Vice President Peter Savagian, FF Global Manufacturing Senior Vice President Dag Reckhorn and FF Global Product Senior Vice President Simpson (Nick Sampson) ) accompanied by the whole process.
On July 15th, the FF US public relations team responded to the question of the first financial reporter on the mass production target: 'According to the plan, mass production on time.' But refused to disclose the specific production figures.
According to the latest announcement of FF, the time for mass production preparation is set at the end of 2018.
Relieved as ' Jia Yueting
The visit to the FF headquarters in Los Angeles was also the first time that Xu Jiayin had visited the Evergrande since it announced its investment in FF.
According to FF, Xu Jiayin conducted a careful investigation of the core R&D departments of FF headquarters, such as manufacturing, electrical laboratory, powertrain, battery electronic control, design studio, vehicle safety, car networking and autopilot, and experienced FF. The first high-end electric car FF91.
'Xu Jiayin highly praised FF's global leading product technology, and highly praised the interior and exterior design and product performance of FF91. ' FF said.
Xu Jiayin said that he was 'seeing is believing' when he visited.
He said: 'Investing in FF is definitely the right decision. Evergrande will give FF all-round support in terms of capital, production base construction and product sales.'
Xu Jiayin blessed FF, and also let Jia Yueting, who was once overwhelmed, no longer have to run for money. In the photo of Xu Jiayin’s official visit, Jia Yueting looked relaxed and accompanied the whole process of 'smiles'.
High-tech think tank - Internet studio founder Fang Xingdong also arrived in Los Angeles after Xu Jiayin's visit and began to investigate FF. Fang Xingdong told the First Financial Reporter: 'Jia Yueting is in good shape, he is working hard, and everything is going well. By the way, Fang Xingdong and Jia Yueting had a lot of contacts, and went to the United States several times to investigate FF.
On June 25 this year, FF announced that after the US government's approval in the past six months, the first round of financing of US$2 billion (about RMB13.4 billion) was approved by the US Foreign Investment Review Board (CFIUS). Evergrande Health Group (00708.HK) holds a 45% stake in FF through Season Smart Limited. Jia Yueting holds a 33% stake and continues to serve as CEO of the joint venture (CEO), with a remaining 22% stake Attributable to the company's management.
In addition, Evergrande appointed two board members of the joint venture company and appointed Xia Haijun as the chairman of the joint venture company.
After passing the CFIUS audit, Shiying has completed a total investment of RM800 million into the FF for the US-China business operations of FF. According to the agreement, if the established production target is achieved, FF will continue to receive a total of US$1.2 billion. The amount of investment was $600 million each on December 31, 2019 and before December 31, 2020.
Despite the capital injection of Evergrande, Jia Yueting no longer holds the position of chairman of FF, but he still has control over the company. The joint venture adopts the AB share model, and Jia Yueting has the right to vote for '1 share and 10 votes' as the founder and CEO.
However, according to the gambling agreement, which is the binding agreement on the actual control of FF, if FF can not complete the goal of mass production preparation by the end of 2018, or if Evergrande thinks that Jia Yueting is unable to perform its duties, then Jia Yueting’s voting rights Will be transferred to Evergrande, thus losing control of the company.
Empty mass production target
The focus now is whether FF can achieve mass production this year? Jia Yueting's team looks confident.
On the last day of June this year, Tesla announced that Model 3 achieved its goal of producing 5,000 vehicles per week, which gave the world's electric car startups a shot in the arm. However, Tesla developed it very early. The mass production target is different, and the mass production of FF does not have a quantified number.
Jia Yueting initially declared to the outside world: 'The annual production target of different models of FF will reach 150,000.'
FF co-founder Tony Nie told the First Financial Reporter: 'The production of at least a few thousand can be achieved. Jia Yueting's challenge is not small, but it is not impossible.'
Nie Tianxin has left FF at the beginning of this year. The three co-founders of FF are currently only left by Jia Yueting and another co-founder Sampson.
In February of this year, FF former chief financial officer Stefan Krause told the First Financial Reporter that FF may first achieve mass production of FF91 in 2019.
But even at this point in time, it seems that some engineers in the industry are still unable to complete the task.
An engineer who asked not to be named told the First Financial Reporter that he was worried about the safety concerns that FF91 might accelerate with mass production targets.
After Tesla announced its goal of mass production, it also attracted criticism from the market. For example, analysts questioned whether Tesla’s third production line temporarily built in tents outside the factory met safety standards. The workers at the Tesla factory revealed that the workers on the Tesla production line were very mobile. Many workers did not get enough training to get started. They just got skilled and left, which will cause a lot of loopholes in the quality control of Tesla products.
What's more, Jia Yueting's high-end electric vehicle FF91, which is to be mass-produced, must far exceed the existing electric vehicles on the market, both in speed and performance.
According to FF official website data, FF91 sells for up to 2 million yuan, 100 kilometers acceleration time is 2.39 seconds, maximum cruising range is 700 kilometers, and equipped with more than 30 smart sensors and intelligent lifting 3D laser radar, with automatic parking without people , facial recognition technology, seamless access to advanced technologies such as the system. At the same time, it also has a smart interconnect ecosystem with up to 10 super large screen and light speed network portal.
Part of the funds have been injected into the Chinese factory
Evergrande Health’s announcement on June 25 also revealed that FF’s Hanford facility in Los Angeles has prepared for a mass production plan by the end of this year and has obtained a local engineering permit to prepare for construction. The commissioning of production line equipment has also been fully launched. On June 7 this year, FF also announced the general contractor of the Hanford factory and carried out recruitment work.
At the same time, part of the financing of FF has been invested in the construction and construction of the Chinese factory. In April this year, FF affiliated company Ruichi Automobile won the processing and manufacturing block of Wanqingsha Bonded Port in Nansha District of Guangzhou for 364 million yuan. .
According to the announcement, Ruichi Smart Car must introduce a pure electric vehicle assembly project with the world's first-class pure electric vehicle R&D and manufacturing level within one month of winning the land, and it will be completed and put into production within two years. It is understood that FF has at least two test versions. The car is shipped to the Chinese factory to prepare for the expansion of China's operations.
It is not easy to build a car, let alone FF. Looking back at Jia Yueting's coming time, there are always a lot of 'noble people' at key nodes.
Sun Hongbin, who was once impressed by Jia Yueting's pride, finally realized that LeTV was a bottomless pit after the tens of billions of funds had been squandered. The reality is far more cruel than dreams.
Sun Hongbin left his heart to leave LeTV, and Xu Jiayin was the one who took over, which made the outside world a little confused.
Informed sources once told the First Financial reporter that even if Xu Jiayin does not know how to build a car, he will not know that building a car is a project of burning money.
According to the investment budget set by FF's finance team, if this production target is to be achieved, it will require at least $3 billion in investment. This means that even if Xu Jiayin invested $2 billion, it may not be enough to support Jia Yueting's burning rate.
According to consulting firm Sanford C. Bernstein, the Tesla Model 3 production line costs at least $2 billion, with annual sales of 100,000 units of Model X and Model S for $70,000 to $100,000. Income, still can't fill the investment of new production line. Then FF that has no income yet must continue to find money outside Evergrande.
Jia Yueting, a financially-born businessman, is a master of capital operation. This has been known in the music era. Sun Hongbin tried to cut LeTV and LeTV's non-listed companies, but eventually found that 'the fast knife is also constantly messing up'. Due to the complexity of the LeTV system, non The receivables of LeTV.com owed by listed companies are not yet available. The accounts receivable of related party transactions have become 'dead knots'. The longer the time is dragged, the lower the residual value of assets, the less enough it is to fill the pit.
Information shows that Jia Yueting has locked another loan for his Los Angeles headquarters.
According to a public information from the California State Government, the first financial reporter found that in April this year, Deng Chaoying, the vice president of FF, Jia Yueting, established a new company called Faraday Spe in California. Faraday Spe registered address and Faraday Future is the same. Foreign media reported that in May this year, Deng obtained a loan of 17 million US dollars (about 114 million yuan) from iBorrow through a new affiliate.