The EV startup is burning through cash and leaving vendors high and dry.
Late last year Faraday Future was facing imminent closure, its finances were dwindling, employees weren’t turning up for work and founding members were abandoning ship. Then the company’s controversial chief investor and now CEO, Jia Yueting, managed to secure an $800 million investment from Chinese Real Estate group, Evergrande.
The deal came with some harsh conditions which had Faraday Future giving away its intellectual property as well as some of its assets. Despite this, it seemed that Faraday indeed had a future, and up until very recently, the long-awaited FF91 EV seemed to be finally nearing production status. The Detroit Bureau has now unearthed a very different reality, one that seems rather similar to last year’s dilemma.
It appears that Evergrande has filed a complaint with the Hong Kong Stock Exchange accusing Jia Yueting of not honoring the deal that they had made in January. The issue seems to be that whereas Evergrande committed to and paid the $800 million investment, Jia Yueting claims that they are also supposed to inject another $700 million into Faraday Future come January 2019, something he desperately needs as the initial investment has already been spent.
Suppliers are not being paid and some have started procedures to reclaim what they can. Jia is no stranger to controversy as he was accused of creating a $75 million trust fund for his kids by using money intended for the FF91. He has also refused to return to China where he is wanted for questioning by the Chinese Securities Regulatory Commission (CSRC) for debts owed by him to both FF and his tech firm LeEco.
Amidst all this chaos, the FF91 EV meanwhile has become a sideshow instead of the main event. Rival EVs from both established firms like Tesla and imminent arrivals from BMW, Porsche and Mercedes will only make it harder for this new model to gain traction in its segment.
Yueting once again seems to have been partly to blame, continuously interfering with the design and development process and expanding the company’s production targets to seemingly impossible levels, delaying the finalization of the potentially game-changing EV.
The single working FF91 apparently caught fire in front of Faraday Future employees when it was shown to them in September. Clearly, there are some serious issues that need to be resolved if this car, dubbed the 'Tesla Fighter,' is ever to get anywhere near to production status.