English automaker and designer Aston Martin, made famous by James Bond, is partnering with a Chinese technology firm to challenge Tesla in the profit-less luxury electric vehicle market.
Aston Martin will work with Chinese tech titan Jia Yueting, whose company LeEco (previously known as Letv) funds Silicon Valley electric car startup Faraday Future. The two will work together on delivering an electric vehicle to the market by 2018. The car would be the only real challenge to the expensive Tesla Model S, if the two companies can deliver on their promise, reports Financial Times.
Aston Martin unveiled in October the concept design for RapidE, the company’s first electric vehicle. LeEco will develop the systems and battery for the car. The partnership may also result in future production of new electric vehicle lines from Faraday Future, which only released its first concept car design in January.
“We have been encouraged by the project speed and technical depth shown by Letv in the development of the RapidE concept towards full production,” Andy Palmer, chief executive of Aston Martin said Wednesday. “Bringing the RapidE to market by 2018 is an important milestone for both companies.”
Questions abound, however, about the financial viability of Faraday Future and its plans for electric car production. (RELATED: Mysterious Electric Car Startup Pours Billions Into Challenging Tesla)
Luxury electric car production has yet to yield annual profits for Tesla, despite being a popular stock with those interested in renewable energy and cutting-edge technology. Tesla lacks high demand for their expensive models, which have only succeeded in becoming a niche vehicle for the wealthy. The company released worse than expected earnings for the fourth quarter of 2015 in February, delivering only 206 models of its Model X SUV and losing $889 million on the year. (RELATED: Elon Musk’s Companies Down Billions In 2016, Promises Tesla Will Make Money This Year)
Faraday Future is having its own set of problems as it works on establishing a $1 billion production plant in Nevada, prompting experts to question what they can realistically accomplish with Aston Martin.
Much like Tesla, Faraday stands to benefit from environmental tax breaks and subsidies, with lawmakers in the state agreeing in December to allocate $335 million worth of financial incentives for the startup’s plant. State Treasurer Dan Schwartz, however, is concerned about their financial stability and said he won’t approve the funding until Faraday puts down $70 million in initial investment, reports Motor Trend.
Aston Martin and LeEco said in an announcement that following the successful production of the RapidE, they plan to work together on the “next generation” of electric cars through Faraday Future. Industry experts are not convinced this is possible as Faraday has not yet built its plant or debuted a functioning prototype.
“The tie-up with LeEco builds on the earlier cooperation between the two firms and may help speed up development of electric vehicles for both firms,” Professor David Bailey from Aston Business School told BBC. “The potential tie-up with Faraday Future seems much more questionable, though, as it’s not actually clear that Faraday can deliver.”
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