Silk-FAW has scrapped its plans to build a production facility in Italy and may now exclusively manufacture its planned vehicles in China.
The company, created through engineering and design company Silk EV and Chinese car manufacturer FAW, reached an agreement with local authorities in the Emilia-Romagna region in 2021 to build a production facility and research center for high-performance supercars.
However, Silk-FAW recently sent a letter to the Emilia-Romagna authorities, informing them of its intention to withdraw from the agreement. While the company hasn’t responded to requests for comment from Reuters, the Emilia-Romagna region acknowledged Silk-FAW’s decision in the document.
Read: Silk-FAW Pushing Forward With Plans For Italian Production
It is understood that Italian prosecutors were investigating Silk-FAW and that just last week, tax police visited the officers of an Italian procurement agency, Invitalia. This agency had documents on an application by Silk-FAW seeking €38 million ($40 million) in public funding to build its Italian factory.
The future of the planned production site has been in question for quite some time. Indeed, the head of economic development in the Emilia-Romagna regional government, Vincenzo Colla, told Reuters in July last year that the local government was “worried,” noting that Silk-FAW’s “financial flows” had not been up to the needs of establishing such a site.
Silk-FAW quickly responded to these concerns, revealing that it was moving ahead with its plans. It had intended on finalizing the purchase of an area of land for the factory on August 5, 2022 but Reuters notes that the land purchase was never made.
It is unclear if the company’s abandonment of its Italian plans will impact its plans to also build vehicles in China under the Hongqi brand. The company’s first planned production model is the Hongqi H9, featuring a V8 engine working alongside three electric motors to deliver a combined 1,400 hp.
