Beware of Faraday Future and its Potential to Harm the U.S. EV Industry

[Topher]

Too simplistic.
Neither country is wholly capitalist or communist, both are a mixture.

So they are better at BOTH than the US?

Thank you kindly.

 

[Shock-On-T]

So they are better at BOTH than the US?

Thank you kindly.

I know which looks more productive. Whether it's better or not is a value judgement.

The US method:

• choose political leaders in a media-driven popularity contest every few years
• lobby those politicians from every angle during their short few years in office
• argue endlessly about climate and energy
  
• eventually decide EVs will be good for the nation
• tilt the market slightly in favour of EVs (tax credits, government loans)
• wait
• keep waiting
• watch a few startups fizzle out (sorry Fisker)
• hope that an entrepreneur like Elon just happens shows up
• hope that he finds investors (shares/VC) to give him the money to build a factory, hire staff
• hope he survives an endless stream of opposition from dodgy politicians, unions, stock shorters,
• hope that he makes EVs

The Chinese method:

• have one political party for 100 years
• discuss the future of the nation as a committee, planning 50 years ahead
• gather advice on climate and energy from your experts
• decide EVs will be good for the nation
• shoot anyone who disagrees (I jest)
• fund a new government 'department' to run the operation
• move 50,000 farmers, bulldoze farms, build 10 power stations, 100 factories, train 100,000 staff
• make EVs

 

[Chickenlittle]

I know which looks more productive. Whether it's better or not is a value judgement.

The US method:

• choose political leaders in a media-driven popularity contest every few years
• lobby those politicians from every angle during their short few years in office
• argue endlessly about climate and energy
  
• eventually decide EVs will be good for the nation
• tilt the market slightly in favour of EVs (tax credits, government loans)
• wait
• keep waiting
• watch a few startups fizzle out (sorry Fisker)
• hope that an entrepreneur like Elon just happens shows up
• hope that he finds investors (shares/VC) to give him the money to build a factory, hire staff
• hope he survives an endless stream of opposition from dodgy politicians, unions, stock shorters,
• hope that he makes EVs

The Chinese method:

• have one political party for 100 years
• discuss the future of the nation as a committee, planning 50 years ahead
• gather advice on climate and energy from your experts
• decide EVs will be good for the nation
• shoot anyone who disagrees (I jest)
• fund a new government 'department' to run the operation
• move 50,000 farmers, bulldoze farms, build 10 power stations, 100 factories, train 100,000 staff
• make EVs

Communist party not in power in China until after WWII

 

[ecarfan]

have one political party for 100 years

Communist party not in power in China until after WWII

True. It was 1949 when the Chinese Communist Party assumed power. So not 100 years, but 67 years ago.

And now China is sort of half Communist, half capitalist (at least).

 

[Shock-On-T]

Poetic license with all numbers
Point being to highlight US/China difference.
100 years is to 4 years what 67 years is to 4 years, at least in politics.

 

[Allante]

I began this discussion over a year ago, positing that FF was a sham by its founder, Jia Yueting, intended to steal American IP and ingenuity and transfer it to China. Yet, most of the responses here ridiculed my thesis. I encourage contrarians to read a piece that The Verge ran last week. The Verge article -- fully supported by evidence -- exposed FF for being precisely what I argued it is. Some notable quotes:

"Faraday Future’s US employees . . . signed onto the company believing that it was truly an independent American automotive effort . . . . but as previous reporting has illustrated, this was never really the case. Patents issued to Faraday Future wound up being used by [Jia's Chinese company]."

"Why help start a company in the United States and frame it as an independent effort when that’s not really the case? “China can’t make good electric cars,” one former high-ranking employee says. “They don’t have the design, they don’t have the battery technology.” Seeing difficulty in attracting talent in China as well as getting a Chinese brand to sell in the US, YT started Faraday Future and framed it as an American startup in order to attract talent and create intellectual property that could then be used to benefit [YT's Chinese companies] . . ."

"[A]rmed with new funding and direct control of the company as its CEO . . . YT could continue this duplicitous push . . . [a]nd . . . continue to operate outside the best interest of producing a car in the US . . .”
​

None of this is new -- I knew this years ago. But what is alarming is Jia's open and blatant disregard for the law. The article notes:

"One former employee recently recalled an internal presentation . . . meant to help soothe [cultural] tensions . . . . [o]ne particular section of the PowerPoint that was shown included “the Chinese perspective on what was difficult about Americans,” this person says, including that “Americans are too concerned with . . . ‘the law.’”
​

This article is worth a read -- Faraday Future’s HR head resigns as cultural rift in the workforce deepens.

FF employees are not to blame -- they are the victims of this scheme.

 

[Cosmacelf]

I gotta say, Allante, that your post above this one makes the most sense of what the heck FF is doing. Chinese companies, as a standard business practice, steal IP. They don’t see it as a big deal. “Cultural difference”, etc.

And while Tesla has opened their patents up, everyone knows the real Tesla (and Panasonic) IP are trade secrets, never to be disclosed.

So how to steal such IP? Short of industrial espionage (and you’ve got to believe that Tesla learned something from SpaceX about keeping secrets), the best way is to hire away engineers from Tesla. And for that you need a US car company.

I still think that FF looks so lame, that only gold diggers or fairly clueless people would go work for them. I don’t know how many truly in the know engineers they’ve managed to hire.

Btw, even if a company manages to steal trade secrets, the answer is to constantly innovate. Cisco has done a remarkable job at keeping market share while under assault from Huawei, even as Huawei churns out knock off products. Also remember that Chinese consumers aren’t fooled. Those that can afford it will buy foreign made rather than Chinese made as they have little respect for Chinese manufacturing quality.

 

[anticitizen13.7]

I know which looks more productive. Whether it's better or not is a value judgement.

The US method:

• choose political leaders in a media-driven popularity contest every few years
• lobby those politicians from every angle during their short few years in office
• argue endlessly about climate and energy
  
• eventually decide EVs will be good for the nation
• tilt the market slightly in favour of EVs (tax credits, government loans)
• wait
• keep waiting
• watch a few startups fizzle out (sorry Fisker)
• hope that an entrepreneur like Elon just happens shows up
• hope that he finds investors (shares/VC) to give him the money to build a factory, hire staff
• hope he survives an endless stream of opposition from dodgy politicians, unions, stock shorters,
• hope that he makes EVs

The Chinese method:

• have one political party for 100 years
• discuss the future of the nation as a committee, planning 50 years ahead
• gather advice on climate and energy from your experts
• decide EVs will be good for the nation
• shoot anyone who disagrees (I jest)
• fund a new government 'department' to run the operation
• move 50,000 farmers, bulldoze farms, build 10 power stations, 100 factories, train 100,000 staff
• make EVs

The chaos and destruction built into the U.S. system does have one “advantage”: rapid evolution. The strong and adaptive thrive out of necessity. The weak die.

 

[Shock-On-T]

The chaos and destruction built into the U.S. system does have one “advantage”: rapid evolution. The strong and adaptive thrive out of necessity. The weak die.

But also rapid devolution, as is happening now.

 

[anticitizen13.7]

But also rapid devolution, as is happening now.

The American government is unfortunately malfunctioning, but the chaos is causing change. The question is whether the mutation ends up with something beneficial or become a cancer that kills the system or leaves it severely weakened.

The government is a major system, but not the only factor.

 

[Uncle Paul]

I get it. Foreign national feins starting a tech company with $Billiions behind them.

Local politicians offer them free land, tax advantages, lower utilities costs to build in their towns.
Hire some of the best people from existing companies. Offer them tremendous salaries, benefits, and perks.
Ask them to lay out a best practices strategy to produce the produce. Get detailed information for all phases of roll out.
Pick their brains for all the details, then dump them to the curb. Abandon the proposed building site, but maybe bulldoze some land to make it look good, then take all this info and intelligence back to the homeland and build the plant and product for real.

Get all the latest technology for peanuts, and then compete with the existing companies and drive them out of business with lower priced goods.

Another way is to buy one of their products. Tear it down and reverse engineer it on the cheap, them churn out cheap copies and steal away their customers one by one.

They learned this from American companies. Indian Motorcycle bought a Harley-Davidson. Tore it down. Learned about an innovative clutch or something and patented it. When they got the patent they sued Harley-Davidson for patent violation and prevented them from using their own design. Also got a ton of money and weakened Harley with the legal costs of defending their own product.

Apple also did this. Steve Jobs worked his way into Xerox and saw their internal designs for a GUI and mouse. Jobs took that info and integrated into his own computer and the rest is history.

Industrial espionage is a finely tuned art.

 

[mal_tsla]

Actual Xerox/Apple history:

Did Steve Jobs steal everything from Xerox PARC? - Mac History

TLDR Xerox allowed them to come, showed stuff willingly, allowed them to run with the ideas in exchange for some Apple stock. The only theft in this era happened at Microsoft.