The Faraday Future FF91 EV.
Electric vehicle startup Faraday Future Intelligent Electric Inc (“Faraday Future”) is set to receive another financial lifeline after the company signed a deal to raise up to $350 million, Reuters reported on Monday.
Faraday Future said that financing from an affiliate of Yorkville Advisors Global with an initial commitment of $200 million, gives it the cash it needs to start production and deliver its first vehicle to customers named the “FF91”.
Faraday Future was once one of the most promising new electric vehicle startups to emerge after Tesla, but the company ran into financial trouble after the company’s billionaire founder and main backer Jia “YT” Yueting filed for bankruptcy protection in 2019.
Just last week, Shareholders last week approved a reverse stock split proposal after Faraday Future received a notice from the Nasdaq Stock Market on failing to maintain a minimum bid price of at least $1 per share for 30 consecutive sessions. The stock is currently trading at just $0.60.
Faraday Future launched its IPO in July 2021 in a SPAC deal with Property Solutions Acquisition Corp. The new company’s stock trades on the NASDAQ under the symbol “FIFE”. However, Faraday Future’s stock has lost over 90% of its value since the start of 2022 as the company faced financial setbacks and which has delayed the development of the FF91.
The futuristic FF91 was unveiled at CES in 2017 in Las Vegas.
Although the official technical specs of the FF91 are unclear, Faraday Future said the ultra-luxury EV will have three electric motors delivering a combined output of 1,050 horsepower. The SUV would also feature a 130-kWh battery pack for a range of 378 miles.
In Oct 2021, Faraday Future laid out plans for “seven manufacturing milestones” that would culminate with the production intent model of the FF91 at its Hanford production facility in California. The first was installing pilot equipment at its Hanford manufacturing plant’s pre-production build area.
In August Faraday Future announced that its Hanford, Calif. manufacturing facility will officially be named “FF ieFactory California” and will produce the FF 91 luxury EV for North America and China markets.
Milestone 2 was securing a Certificate of Occupancy, clearing the path for the company’s pre-production builds to start. Milestone 3 was to begin foundation construction for all remaining production areas at the factory, including body, paint, warehouse and vehicle assembly.
In April, Faraday Future announced that these first three milestones have been reached.
Milestone #4 is the start of pre-production builds for final engineering validation and certification. The other milestones will follow after reaching the fourth.
The 6th and seventh milestones are the completion of construction and equipment installation in the final vehicle manufacturing areas. Faraday Future announced in August that robots are undergoing final testing and validation to support production activity.
Faraday Future revealed a production-intent version of its FF91 SUV eariler this year with plans to kick off production in the third or fourth quarter of 2022. But the company’s ongoing financial problems led it to push ahead the FF91’s production start.
In September, Faraday Future blamed its struggling fundraising efforts on a “misinformation campaign” from its own employees that came to light in August. Over the summer, several employees called the company’s board and shareholders to remove Executive Chairperson Susan Swenson, Reuters reported at the time.
In a letter dated August 23, 2022, representatives for a group of roughly 140 employees alleged that Swenson had organized attempts to “push the company into bankruptcy and restructuring”.
Faraday Future was founded in 2014 and headquartered in Los Angeles. The EV startup was once viewed as a serious competitor to Tesla. However the company’s financial problems forced it to delay the development of the flagship FF91 multiple times.
The EV startup barely made it through 2017. However Faraday Future managed to secure a last-minute, $2 billion lifeline from Evergrande in Dec 2017 to stay afloat. Evergrande Health Industry Group is the healthcare division of Hong Kong-based real estate group Evergrande, which is one of the world’s most valuable real estate companies.
The disbursement of the funds was contingent on Faraday meeting agreed upon production goals for the FF91, which Evergrande said it failed to achieve. Evergrande claimed Faraday Future wasted hundreds of millions of dollars developing the FF91.
Evergrande accused Faraday of squandering its initial $800 million investment and was cut off from the remaining $1.2 billion, putting the automaker in a dire financial situation as the case made its way through arbitration in a Hong Kong court. While Faraday Future claimed that Evergrande broke its agreements to make regular payments to the company.
Evergrande eventually walked away with full control over Faraday Future’s efforts in China, with both sides agreeing to drop all ongoing litigation against each other, allowing Faraday Future to seek funding elsewhere.
Faraday Future again ran into financial and organizational problems which led it to furlough employees in 2018. In addition, the company’s plans to build a $1 billion factory in the Nevada desert fell through.
Today, Faraday Future is led by former BMW engineer Dr. Carsten Breitfeld, who took over as CEO in 2019. Breitfeld, is an auto industry veteran who spent twenty years at BMW. He is best known as the designer of BMW’s futuristic i8 electric hybrid car.
At BMW, Breitfeld led the i8 project from concept to production vehicle in just 38 months, which was an unprecedented speed for the traditionally slow moving auto industry. Based on Dr Breitfeld’s past auto industry experience, he was tapped to lead the company as well as the production efforts of the FF91.
“When I did the BMW i program, I came in contact with the future of mobility,” Dr Breitfeld told FutureCar in a 2019 interview. “I really want to be part of the transformation and become part of a company that shapes the future of transportation.”
Dr Breitfeld compares the FF91’s electric powertrain technology to the Porsche Taycan sedan and Audi e-tron SUV, but says FF’s powertrain is much more technologically advanced.
FF describes the passenger experience in the FF91 to that of a “private jet on 22-inch wheels” designed to offer passengers a relaxing, lounge-like experience. The FF91 was developed using virtual and augmented reality so its designed around how passengers will interact with the vehicle.
With new funding agreements in place, the California-based EV startup may be able to get back to its mission. However the field of competitors in the EV space is much bigger than it was in 2014 when Faraday Future was founded, so it’s likely to be an uphill battle.