Will it succeed this time?
It's been quite some time since we've heard from Faraday Future, the California-based EV startup that started off with a bang but later fell into deep financial troubles. A few years ago, its chief investor and CEO, Jia Yueting, managed to secure a last-minute $800 million investment from a Chinese real estate group, but it came with some tough conditions, such as forfeiting its intellectual property and other assets. Unfortunately, that wasn't enough to prevent layoffs and salary cuts. Even two of its co-founders resigned.
But today is a new day and according to Reuters, Faraday Future is hoping to close a deal shortly to go public. It aims to do so through a reverse mortgage with a special-purchase acquisition company, also known as a SPAC.
This isn't the first time an EV startup has used a SPAC, or a shell company, to go public. Lordstown Motors did the same in August for its own IPO. The new shell company basically raises money through an initial public offering to purchase an operating entity usually within two years or so.
As for Faraday Future, its current CEO, former BMW executive Carsten Breitfeld, says that they are "working on such a deal … and will be able to announce something hopefully quite soon." Breitfeld only joined Faraday Future last year and has since promised to begin production of the Tesla Model X-fighting FF 91 electric luxury SUV within nine months after securing funding. Assuming all goes well, series production will get underway 12 months after a deal is signed.
The goal now is to raise somewhere between $800 million and $850 million specifically for the vehicle's launch. As for Jia Yueting, who was forced to file for bankruptcy, he is no longer a part of the automaker. He also no longer owns any stock.
There was a time when Faraday Future was seen as a serious Tesla rival, but that all fell apart. Today, the Tesla Model 3, Model S, and Model X rule while Faraday Future is still working to get its first vehicle built. More details about Faraday Future's planned IPO, such as a timeframe, should be announced soon.