LeEco secures $600M in fresh funding as financial issues reportedly halt electric car project

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There’s good news and bad news for LeEco, the ambitious Chinese tech company that is working on electric cars, smartphones, smart TVs and more.

Fresh from the leaking of an internal letter from billionaire CEO Yueting Jia which cautioned against its rapid international expansion, the company has landed $600 million in fresh funding. At the same time, however, the brakes have apparently been hit on its electric vehicle project in the U.S.

LeShi, LeEco’s Chinese parent company, raised the new cash from more than 10 Chinese companies, Reuters first reported. A spokesperson declined to name the investors specifically, but did tell TechCrunch that the backers are all Jia’s classmates from Beijing-based Cheung Kong Graduate School of Business.

Jia wrote to the company’s 10,000-plus staff earlier this month warning that the company’s growth on multiple new projects was unsustainable. LeEco began in smart TVs and a Netflix-like service, but it has fanned out into commerce, smartphones and an electric car project with U.S.-based Faraday Future.

The letter was assumed by many to mean that LeEco’s U.S. operations and the electric car project that it is working on with Faraday Future are in jeopardy. However, speaking at the TechCrunch Beijing event last week, LeEco’s North American operations lead Brian Hui denied that his business would be impacted. He also stressed that the development of the car is the firm’s “highest priority” and will continue. Hui did admit that LeEco is entering a new phase of its business which, among other things, will mean fewer large scale investments like the recent $2 billion acquisition of Vizio.

The commitment of new financing looks to have come at just the right time with reports suggesting that LeEco and Faraday Future are desperately in need of money for the car project, which is aimed at toppling Tesla.

Jalopnik reported that work on the duo’s proposed $1.8 billion manufacturing plant in Nevada has paused, while it is apparently behind on payments to its construction firm.

LeEco did not comment on the current situation of the factory when we asked. Reuters reported that the initial $300 million in capital will arrive before the end of November, wherein it will go towards the Faraday Future partnership and the fledgling LeMall business in the U.S., an e-commerce platform for selling LeEco’s hardware.