A CHINESE tech entrepreneur’s U.S. startup halted construction this week on a US$1 billion electric vehicle factory in Nevada, a sign financial problems were escalating for Jia Yueting, who aimed to be a rival of Elon Musk’s Tesla Motors Inc.

    Faraday Future, based in Gardena, California, reportedly missed several payment deadlines with contractor AECOM, according to a Nevada state official. A Faraday spokesperson declined to confirm whether it missed payments, but said Faraday “is working with” AECOM during an “adjustment period” at the plant and that it planned to restart work at the plant in 2017.

    “This is a Ponzi scheme,” Nevada State Treasurer Dan Schwartz said yesterday. “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.”

    Faraday is part of a network of young electric vehicle companies in China and the United States backed by Jia, co-founder and chairman of LeEco. He said last week his firm LeEco, which has invested in high-tech products from electric cars to smartphones, faced a shortage of cash and was suffering from expanding too fast, in too many directions.

    LeEco’s parent, Leshi Holdings, said yesterday it had secured commitments in China for US$600 million to support LeEco.

    LeEco said in August it would invest nearly US$2 billion to build an electric car plant in eastern China.

    Earlier, Faraday negotiated a deal to build a US$1 billion plant in Nevada, with the state providing more than US$200 million in incentives. The plant was expected to create 4,500 jobs.

    Schwartz said Nevada had yet to issue US$175 million in bonds that were part of the incentive package for the plant, and “is not on the hook for anything.” (SD-Agencies)