Is Faraday Future the next Fisker Automotive, a electric car startup that crashed and burned?
Electric car startup Faraday Future’s unveiling of a concept car on Monday night at The Consumer Electronics Show in Las Vegas has generated far more questions than answers.
Following an event where the company showed off a Batmobile-style CES set-piece, it’s pretty clear that the company is no legitimate Tesla TSLA competitor at this point. The company now even says that it doesn’t intend to sell a real car for a couple of years down the road.
But will Farady Future end up being the next Fisker Automotive, an overhyped and well-funded electric car startup that quickly crashed and burned? Or does Faraday Future have a more nuanced alternative strategy: to not so much compete with Tesla, but to sidestep it by mainly selling into China and using its assets and connections there?
At this point, it’s hard to tell what’s really happening with the company. But here are several thoughts about it and its bizarre concept car launch:
Faraday is more Fisker than Tesla at this point: Fisker Automotive and Faraday Future have more in common than the same first letter and a desire to build a brand new electric car from the ground up. If you don’t remember Fisker, it was an electric car startup that emerged in 2006 and eventually received $1 billion in backing from Silicon Valley venture capitalists, as well as funding from the U.S. Energy Department.
Fisker, which had a well-known car designer at its helm, launched a sexy high-end electric car. But after a serious of problems with its cars’ tech, the company was forced to close shop after delivering around 2,000 cars. Later, Chinese auto parts company Wanxiang America bought the firm and is trying to resurrect it.
Like Fisker, Faraday Future appears to have lots of money ahead of anything else. It says it plans to spend $1 billion on a Nevada factory. It’s also received a major incentive package from the state that will help defray costs. Instead of Silicon Valley or the federal government, Faraday’s funding reportedly comes from Chinese Internet video billionaire Jia Yueting, who heads what’s known as China’s Netflix.
Faraday, like Fisker, has also placed an emphasis on design. It’s design chief, Richard Kim, worked on design of BMW’s i3 and i8 cars. He was one of the ones who unveiled Faraday’s concept car Monday night. Design site Cool Hunting says it was originally born out of a doodle on Kim’s desk.
At Fisker, car designer Henrik Fisker led much of the company’s early decisions for its Karma car. However, that ended up being one of the core problems with the company, as the engineering ended up being subordinate to the exterior design. The cars ended up being plagued with both hardware and software problems.
Similar to Fisker’s execution, Faraday seems to be putting the cart well ahead of the horse. Fisker raised huge funding, and a federal loan, partly for its second car. But the company struggled mightily to build its first car, to the extent that its second car never made it to customers. Faraday, which is only 18 months, boasts that it’s moving rapidly too. It says it already has 750 employees and will break ground on its Nevada factory in a matter of weeks.
Is Faraday’s main goal the Chinese market?: Faraday told The Verge: “We see the main markets being the U.S. and China, but it’s a global launch strategy.” But could the company be more focused on the Chinese electric car buyer—a far different customer than in the U.S.?
If so, the company would reap obvious benefits from its partnership in the country with Yueting’s LeTV, which could help develop in-car entertainment and software. One of the reasons Apple has reportedly been working on electric vehicles is as an avenue for its other digital products. Faraday’s well-connected Chinese billionaire backer could also help secure important partnerships with movie and music studios in the country along with other deals.
WATCH: Learn more about Apple’s electric vehicle plans:
If Faraday makes electric cars in Nevada that are shipped to China, the company may be able to attract Chinese consumers who want to buy premium U.S.-made products. Tesla also wants to tap into the China market, where demand for electric cars is growing rapidly while attracting big players like electric car company BYD and, more recently, car company Xindayang which is using batteries from Boston Power.
Faraday Future Head of PR Stacy Morris said to Fortune via email that the company plans to launch in the U.S. first, but will have a global launch strategy. “Our Nevada plant will be exporting cars to the entire world,” said Morris.
Going fast isn’t really a good thing for an electric car startup: A Faraday spokesperson noted during the launch event that the company was moving much faster than Tesla. He pointed out that it took Tesla nine years to deliver its first mass market vehicle. In contrast Faraday Future is only 18 months old.
But it took Tesla all that time to learn from its many early mistakes and to create a car that its customers genuinely love. In contrast, Fisker appeared to rush out its first car and ended up thoroughly underwhelming many of its customers. Cars aren’t mobile apps—they require time to ensure they operate safely and reliably.
Is Faraday going mainstream or high-end super car?: One of the biggest questions for Faraday Future is what market it is focused on. Is it the mass market, low-end or the high-end like Tesla and Fisker’s early cars did? Faraday’s recently released a video hinting that it’s interested in more mainstream car-sharing services or even in a service like Uber.
But the company’s concept car was anything but mass market. Instead it was a concept of a single-seater racing car with out-there futuristic features. At the same time, the company told Bloomberg that the first car Faraday will produce could “be a premium-priced car,” like “a sedan or a sport utility vehicle.”
Faraday needs something else soon: There are far more questions than answers following Faraday’s big reveal. But it’s clear Faraday Future needs to show some real progress on a car that it intends to sell relatively soon by auto industry standards. It also needs to talk more openly about its business strategy and target markets. More information may equate to less skepticism the next time the company tries something unusual like showing off a comic-book style racing car.
Updated at 8:37 AM on January 6 with comments from Faraday Future.