Electric car startup spun out of Faraday Future ‘EVelozcity’ claims to have raised $1 billion

We first revealed the existence of Evelozcity, an electric vehicle startup founded by former Faraday Future (FF) executives, a few months ago and it might already be a $1 billion company.

The startup now claims to have raised ~$1 billion to bring its electric vehicles to market.

As we previously reported, Stefan Krause, former BMW and Deutsche Bank CFO, and BMW’s head of EVs, Ulrich Kranz, were two of FF’s top executives until recently leaving to launch their own EV startup and bring several other FF employees with them.

At the time, sources told Electrek that Krause was able to raise funds for his new startup using the groundwork that he had done on the previous deals that he tried to close for FF, but that ended up failing due to disagreements with Jia Yueting, FF’s main financial backer who is now in control of the company.

FF later ended up suing EVelozcity over alleged thefts of confidential information and poaching employees while still working at the startup.

Being already involved in a legal battle is not a great way to start a company, but it looks like they will be able to defend themselves since they now claim that the secured funds from investors are worth around $1 billion.

Krause said in an interview with Forbes today:

“That’s the ballpark you normally have to have, around a billion dollars, plus or minus. We have investment or commitments for this kind of amount of money,”

He didn’t disclose the investors, but they are apparently from China, Europe, and the U.S.

During the interview, Krause elaborated on the new startup’s strategy and specified that they are not going to manufacture the vehicles themselves.

He said:

“Over time battery packs and electric motors will not offer a potential for differentiation anymore.The technology is evolving and that will be a commodity over time.”

Krause said that they are emulating Apple and looking to China and other countries for manufacturing partners.

He added:

“If you look at Apple, they are designers and engineers, they don’t necessarily manufacture themselves. We want to develop an American boutique, native EV brand. That’s what we’re all about. We believe that the engineering and design skills are going to be the core ones, not the manufacturing ones.”

The engineering team is going to be led by Kranz (pictured above), who as previously stated, used to lead BMW’s EV efforts. As for the design team, Richard Kim is going to be in charge.

Kim is better known for having designed the BMW i3 and i8, but he was most recently leading Faraday Future’s design team.

Therefore, all of EVelozcity’s leadership is coming from BMW by way of Faraday Future.

The company reportedly has 100 employees and plans to grow to a staff of 300 by the end of the year. They are still only a few months old and very much in stealth mode so we don’t expect to see anything from the company anytime soon, but we will keep you posted if anything shows up.

Electrek’s Take

There’s some interesting stuff here.

“We believe that the engineering and design skills are going to be the core ones, not the manufacturing ones.”

That’s basically the exact opposite of what Tesla is going for lately.

Tesla CEO Elon Musk has been pushing the idea lately that Tesla’s long-term advantage is going to be manufacturing over engineering and design. He even said that Tesla’s factories are going to be the company’s main products in the long-term.

Of course, auto manufacturing is an insanely capital expensive business and even though EVelozcity appears to be better funded than most startups, it’s still only a drop in the bucket of what they would need to achieve volume production of electric vehicles.

So it makes sense that they would have a completely different strategy than Tesla. The company itself first started with the same strategy of engineering and design but outsourcing manufacturing and assembly with the first generation Roadster.

It didn’t turned out so well, which is why they have invested more in manufacturing since then, but it could be a different story for EVelozcity.

We will have to wait and see.