In the meantime, though, Nevada has committed the company to providing $3 million in initial funds for engineering and surveying the 18,000-acre Apex Industrial Park site, a desolate expanse that's a half-hour drive and a world away from the lights of the Strip. Faraday's site would take up only 900 acres of that land.
Faraday then is to put an additional $10 million into escrow to cover the cost of extending water, sewer and rail lines to the Apex site. Those funds are to be delivered to the state as early as May.
"It's a win-win," Nevada Gov. Brian Sandoval, a champion of the project, said at the groundbreaking. "This site has been dormant for 20 years and that's part of what the importance of this project is."
Sandoval and Nevada lawmakers, who pushed through more than $215 million in tax incentives and abatements for the project in December, are hoping Faraday's presence will lure other factories to the area. They also point to the 4,500 jobs Faraday has promised will be created over the next decade.
Faraday's willingness to shoulder the burden of getting infrastructure to the remote location was "undoubtedly" one of the appeals of the deal, Sandoval said. "We needed an anchor tenant."
The site is an ungraded plot of land with no infrastructure, and Faraday has yet to hire a contractor. Still, Faraday hopes to complete construction on the plant in as little as two years, according to Dag Reckhorn, vice president of global manufacturing.
It's those long odds that led Nevada officials to negotiate hard with Faraday. The company's early payments and deposits will be refunded once the state issues bonds to cover the costs of developing the Faraday site. But before the state issues those bonds, Faraday will have to put up $75 million in collateral.
That money would be returned only after the company has built at least 1.6 million of the proposed 3 million square feet at the site and is generating revenue from the sale of EVs built there. At least half of the eventual 4,500 jobs must be for Nevadans.
The conditions were enough to satisfy Nevada's treasurer, Dan Schwartz, a longtime skeptic of Faraday. Last year he raised concerns over the source of Faraday's funding and whether it was prudent to give more than $215 million in subsidies to an unproven startup with murky finances.
Much of Faraday's money comes from Chinese billionaire Jia Yueting, whose wealth is tied up in the online media conglomerate LeEco. Some of LeEco's holdings are publicly traded on China's Shenzhen exchange under the name Leshi. Trading was halted in December pending a broader reorganization of Leshi, LeEco said. Leshi has repeatedly delayed resuming trading, and has now said it will happen on May 7.
"We've protected ourselves and the burden is now on them," Schwartz told Automotive News last week. "That means I have to swallow my skepticism for now, but we'll be monitoring the situation."