Faraday Future’s story has been a roller-coaster. Once seen as the number one EV startup, it has since been crippled by severe financial and management problems.
It seems like the startup was finally out of the woods after a large Chinese holding company promised a massive $2 billion investment in Faraday Future, but after a fallout with the investors, the company recently had to lay off employees and cut salaries.
The Chinese holding company, Evergrande, agreed to take a 45% stake in the company for $2 billion in funding starting with “initial payments totaling $800m payment through early 2018, and the remaining $1.2 billion over time.” According to FF, the firm failed to do additional payments and “tried to take control of the startup.”
They have reportedly been trying to prevent FF from seeking funding from other investors.
Last week, the company said that it won a decision at the Hong Kong International Arbitration Centre and they are now able to seek new investments.
Nonetheless, the whole ordeal has hit them pretty hard. They wrote in a press release:
“As a result, we were a forced to take unfortunate drastic measures to reduce salaries and to let go of some of our valued employees. FF recognizes that our dedicated employees are the primary driver of our success and incredible progress, and we regret having to part with any of our colleagues under these circumstances. In solidarity with all FF employees, FF’s co-founder and CEO YT Jia and many senior executives have agreed to take $1 salaries until our funding shortfall is resolved.”
The company has been hit by several waves of people quitting in the past, especially when several executives started an entirely new electric car startup.
But now they are adding layoffs and on top of it, the company reportedly lost one of their top executives.
According to the Verge, Peter Savagian, one of FF’s earliest top engineering executive and the former chief engineer of GM EV1 electric car, has left the company this week.
I want all EV startups to succeed and I like the FF91, even though I believe it might end up being overpriced, but it’s starting to get really difficult to be optimistic about the future of Faraday Future.
It’s hard to believe that they already spent the $800 million investment from Evergrande and they somehow managed to lose access to the rest – unless the company really screwed them over.
Financial issues aside, Savagian was one of the first hires we reported about in our early stories regarding FF.
He is an EV legend and at the time, made hopeful that the startup would be taken seriously. But now, many of his most respected colleagues have left the startup.
What do you think of FF’s chances at this point? Let us know in the comment section below.
FTC: We use income earning auto affiliate links. More.
Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.