LeEco’s financial woes are well documented so far and the time is approaching for the Chinese giant to make a decision whether they should drop their EV project in the US completely or not.

AutoNews China posted a detailed analysis of the situation LeEco is in right now, pointing out that the company will probably have to withdraw from its ambitious plans in the USA.

Early last year LeEco’s founder Jia Yueting formed a separate company in the US, Faraday Future, with the goal of building a $1 billion EV manufacturing facility in Nevada. Despite a continuous cash crunch, Jia has repeatedly backed the plans to move forward with the factory, up until now.

Last January LeEco was desperate to solve its cash shortage problem and so it signed an agreement with Chinese property developer Sunac China Holdings for an investment of 15 billion yuan ($2.2 billion).

The money went into LeEco’s TV manufacturing and film-making businesses, making Sunac at the same time the company’s second largest investor. Jia hoped that Sunac would also invest in his US project but Sunac’s chairman Sun Hongbin, who is described as a pragmatic, straight-talking businessman, made it clear that he has no plans of doing so.

Sun did his research though before this decision, after leading a team that looked into China’s electric-car market and also flying to the US in order to check out the construction of LeEco’s manufacturing facility in Nevada.

“It would be good if [LeEco] can do well in one or two of its business areas”, Sun said when asked about LeEco at Sunac’s shareholder meeting in March. “The rest [of the businesses] should be sold” or spun off into joint ventures with strategic partners.

Sun also played a major role in LeEco’s recent management shakeup, which resulted in Jia being stripped if his role as CEO but keeping his position as Chairman. LeEco has now a new CEO and, for the first time in its short history, has hired a chief financial officer.

LeEco is still dealing with cash shortage – even with Sunac’s investment, and with Sunac’s chairman now forcefully entering the picture, axing the Nevada plant sounds like the next logical step, concludes this very insightful analysis.

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