Faraday Future called a Ponzi scheme

[voyager]

Faraday Future has stopped construction on its billion-dollar electric vehicle factory in Las Vegas. This is another blow against a company with intentionally foggy structuring, mysterious revenue sourcing, and an financially overburdened parent company. Nevada State Treasurer Dan Schwartz, and probably anyone else who has been following this story, is a little less optimistic. “This is a Ponzi scheme,” he said in an interview with Forbes. “You have a new company that has never built a car, building a new plant in the middle of the desert, financed by a mysterious Chinese billionaire. At some point, as with Bernie Madoff, the game ends.” The state of Nevada had agreed to provide more than $200 million in incentives, as the EV factory was expected to create 4,500 local jobs.

Automotive Startup Faraday Future Just Became a Shutdown

 

[green1]

Ponzi scheme is awfully harsh.

Failed business, most likely, Ponzi scheme, I doubt it. A Ponzi scheme is where, with no intention of running a real business, you use the money from later investors to provide returns to early investors until the whole thing collapses under it's own weight.

This is just a flailing business with no direction or vision that spent money like a druken sailor and will eventually run out. We saw a lot of this in the "dot com bubble" and now we have the EV version of the same thing.

 

[ecarfan]

Nevada State Treasurer Dan Schwartz, and probably anyone else who has been following this story, is a little less optimistic. “This is a Ponzi scheme,” he said in an interview with Forbes. “You have a new company that has never built a car, building a new plant in the middle of the desert, financed by a mysterious Chinese billionaire. At some point, as with Bernie Madoff, the game ends.”

At least he is not accusing Musk of being Madoff like the silly article linked to in this thread does: Elon Musk the next Bernie madoff?

 

[hockeythug]

At least Nevada isn't really on the hook for anything as Faraday actually has to build the thing to get the tax incentives. Same with Tesla.