Chinese internet billionaire Jia Yueting has an impressive track record, yet his ambitious electric car plans are riddled with problems and financial questions

“When was the last time when we saw a blue sky with white clouds?” mused Jia Yueting, the Chinese internet billionaire with a passion for electric vehicles.

“The starlit sky has become a distant memory. We can’t wait to clear the haze from China’s sky. Integrating electricity, intelligence, connectivity and social media in a vertically integrated system will disrupt all existing car products.”

It’s an ambitious claim, and all the more so because Jia’s electric car ride-sharing company – the US-based Faraday Future – has yet to show a moving vehicle of any kind.

Faraday Future’s proposed $1bn assembly plant in Nevada has stalled for lack of cash, the engineer behind its crucial battery system recently quit, and a former Faraday Future executive told the Guardian that the company’s first car will be “no Tesla killer”.

While much of the car’s engineering is progressing steadily, Faraday Future is struggling to develop self-driving and entertainment systems for its planned driverless taxi services, according to several former executives who spoke on condition of anonymity. “I think they’ll probably end up trying to license autonomy from someone like Google,” said one of the executives.

Based in Los Angeles and with an engineering office in Silicon Valley, Faraday Future was long assumed to be another startup. In fact, it was formed in April 2014 by Yueting, the billionaire founder of Leshi Internet Information & Technology, or LeTV.

Jia’s story verges on the melodramatic: born into a rural family that was so poor he holidayed in a steel factory, Jia escaped a life of drudgery by focusing on technology. He worked in a local tax office, then started his own computer training company, a telecoms venture and, in 2004, LeTV.

Leshi: LeTV’s mysterious California-based electric car company

LeTV, recently renamed LeEco, has been described as the Netflix of China for its success in streaming video, yet Jia’s companies now also make films, televisions, smartphones and even bicycles. Jia took just five minutes to persuade Foxconn founder Terry Guo that the company, which makes Apple gear, should also be building LeTV’s gadgets.

Then, at the beginning of 2015, LeTV announced that it was establishing the Leshi Super Electric Car Company to build a smart, internet-based electric car, and that the company already had 260 engineers in Silicon Valley.

In August, Jia gave the vehicle a name – Le Supercar – and revealed that it would be designed by a founding member of Lotus China. The company now claimed to have 600 staff working on the vehicle, which would be ready for the Beijing auto show this April.

Facebook Twitter Pinterest Batteries on a car chassis during the unveiling of the Faraday Future FFZERO1 electric concept car in January. Photograph: Steve Marcus/Reuters

Yet there is no evidence of the Leshi Super Electric Car Company in California, no record of employees or any evidence it as ever operated there, and neither of the former employees the Guardian spoke to had seen the car. Instead, all the electric car expertise – and all Jia’s aspirations for vehicles of the future – appear to rest with Faraday Future instead.

On 19 February, LeEco announced a joint venture with Aston Martin to develop an electric version of its Rapide S model, though it is not clear whether this work may fall to Faraday Future.

Where does LeEco end, and Faraday Future begin?

Ding Lei, who was credited last week as co-founder of LeEco’s auto division (although he only joined the company last September), is also the acting global CEO of Faraday Future, according to the executives. (At one point, Apple was rumoured to be using Faraday Future to develop its own electric self-driving car, but no evidence could be found to link the companies.)

Faraday Future has never officially announced its senior leadership, and says only that it has “a strategic partnership” and “an independent relationship” with LeEco.

The companies suffered cultural clashes from the outset. At one point, LeTV managers proposed calling the new company Fara Faro instead of Faraday Future. “The Americans were like, ‘That is the stupidest name ever,’” remembers an executive. “You had an international team that was experienced and open, juxtaposed with Chinese management that didn’t understand the US market and kept deferring to LeTV.”

Nevertheless, Faraday Future grew rapidly. By September 2014, LeTV had bought the company a 124,000 sq ft office building in the suburbs of Los Angeles for $13.25m. Their plans were ambitious: to build a family of 13 super-intelligent electric cars, trucks and minivans sharing a common technical platform. The company has filed for US trademarks for vehicles from FFZERO1 to FFZERO9, and met with officials from California’s department of motor vehicles responsible for autonomous vehicle testing on public roads, the Guardian learned through a public records request.

Tesla hits the gas on self-driving car tech Read more

But as the realities of developing a new vehicle from scratch dawned, Faraday Future reduced its focus to a smaller group of vehicles. “There were definitely multiple vehicles that were being designed. It would be kind of ridiculous not to take advantage of the variable platform architecture,” said one executive, referring to a chassis that can be modified with different batteries, motors and even body shapes.

The first car to be launched is likely to be a luxury vehicle with an extended wheelbase to appeal to business customers. This is about to undergo its first road tests and is scheduled for launch in late 2017. “It’s not really a Tesla killer,” conceded one former executive. “It’ll be much heavier, longer and bulkier than a Tesla but really sculpted and beautiful.” The car has been projected to cost upwards of $150,000.

The company had initially hoped to emerge from stealth and unveil a fully working prototype at the CES trade show in January 2016. But by the summer of 2015, it was clear that the technology would not be ready. Instead, Faraday Future would showcase its design prowess with a concept electric race car that would drive into the press conference. But that vehicle too fell behind schedule. Finally, the company had to scramble to produce a non-functioning, static concept car, costing $2m.

Faraday Future reveals just a little about its electric supercar Read more

In January, Faraday Future’s chief battery architect, Porter Harris, quit. “He was the battery,” said one of the executives. “He designed it and did all the patents.”

Is the money drying up?

There was more bad news ahead. On 7 December, trading in LeTV shares on the Shenzen stock exchange was suspended. This is not uncommon in China, and was supposedly to allow LeEco to incorporate a film distribution company into its listing. The shares were meant to resume trading on 5 January but this was delayed until 31 January, and then again until 7 March.

This raised the suspicions of Dan Schwartz, state treasurer of Nevada, where Faraday Future is promising to build a $1bn, 3m sq ft manufacturing facility. “It’s being built by a company that’s in the media and entertainment business and has never made a car in its life,” said Schwartz in a radio interview earlier this month. Following a trip to China, he told the Los Angeles Business Journal: “It’s the emperor’s new clothes. [Jia] isn’t making any money. He certainly isn’t making any money to fund a billion-dollar car facility.”

For its part, the company still lists dozens of job openings in Los Angeles, San Jose and North Las Vegas, and insists that it is “working out the details” of its factory deal with Nevada. One former executive said there was never any sign of penny-pinching: “Vendors got paid, paychecks were always there, and lunches were always supplied.”

But Schwartz is now insisting that Faraday Future provide a $75m performance bond – essentially a guarantee that the factory will be built – before Nevada starts work on supporting road, rail and utility projects. That bond has yet to appear. Schwartz said Faraday Future did not assure him the $75m would be available even when LeEco shares are unfrozen next month.

“Right now, the state is not out any money,” said Schwartz. “We’ll see what happens after the shares begin trading again.”

Jia himself has seen his personal fortune tumble from a high of nearly $8bn last year to under $5bn today, according to Forbes.

“For years now, Chinese internet entrepreneurs have been able to fuel their domestic and global ambitions on the backs of a red-hot Chinese stock market,” said Joe Paluska, an adviser to the electric car industry.

“But now that the bull market has turned into a bear market, they’ve lost the currency to fuel those ambitions.”