LeEco And Faraday Future Owners Running Out Of Cash

LeEco is currently facing financial difficulties due to their rapid expansion in various businesses, but what does this mean to the automotive industry?

According to Bloomberg, Jia Yueting – LeEco’s CEO – apologized to shareholders and pledged to slash his income to 1 yuan (15 cents) in a letter sent to the company’s employees.

“No company has had such an experience, a simultaneous time in ice and fire. We blindly sped ahead, and our cash demand ballooned. We got over-extended in our global strategy. At the same time, our capital and resources were in fact limited”, Jia wrote.

But why is this information so important, you might ask? Well, for starters, the entrepreneur’s main venture – LeEco – acts as an umbrella company for a number of businesses, including LeEco’s automobile division, Faraday Future, and other partnerships associated with them.

The fact that LeEco is running out of cash could mean the delay (or worse) of its own LeSee autonomous vehicle, Faraday Future’s upcoming all-electric model, and even Aston Martin’s RapidE model – which began development earlier this year.

Regulatory finding show that Jia’s empire relies on a “risky financial model”, as the Chinese billionaire is using his original, successful business, Leshi (the equivalent of Netflix), as a launching ramp for his other companies. To make matters worse, Leshi’s stock has plummeted by almost a third since the start of 2016.

Moreover, in his memo, Jia accuses the car division for the reckless spending, saying it already devoured 10 billion yuan ($1,5 billion) in early development. By the looks of it, the future looks bleak, but it’s not over until the fat lady sings.

PHOTO GALLERY

2019 Volvo S60 T5 Might Be All-New, But It Fails To Impress

Consumer Reports paid $47k for their new S60, but Volvo’s sports sedan did not win them over.

Rare Yamaha OX99-11 Is The F1-Powered Supercar You (Probably) Didn’t Know Existed

Before the Mercedes-AMG One, there was the ultra-rare Yamaha OX99-11.

Does The Electric Taycan Feel Like A Real Porsche?

Customer deliveries of the Porsche Taycan will kick off next year.

2021 Chevrolet Bolt EUV Is A Bolt EV Wrapped As A Crossover

These are the first spy shots of the Chevrolet Bolt EV-based crossover that could be called Bolt EUV.

New Chevrolet TrailBlazer Mule Spied Again As Rumors Suggest Possible Return To USA

Chevrolet could be working on a new body-on-frame TrailBlazer and it come land stateside.

These Two Low-Mileage Honda NSX Type Rs Are A Japanese Dream

The low mileage on these Honda NSXs mean they are far from cheap.

Dashcam Shows Camaro Brake Checking Tesla Before Crash

The cameras of the Tesla sedan captured the dangerous driving of the Chevrolet Camaro.

Facelifted Opel Astra Sports Tourer Makes A Predictable First Appearance

The refreshed Opel Astra Sports Tourer compact wagon will get the same updates as the five-door hatchback .

Ferrari’s Hybrid Supercar Will Feature Three Electric Motors On Top Of The Biturbo V8

A 0-62mph in 2.0 seconds is also rumored, along with a €600,000 starting price.

New Renault Megane RS Trophy-R Breaks Cover And Nordschleife’s FWD Lap Record With A 7:40.10

The Renault Megane RS Trophy-R is the fastest-ever FWD production car at the Nurburgring.