Faraday Future CEO Jia Yueting is reportedly finally stepping down from his role at the electric vehicle startup as part of a restructuring into a partnership.
Ever since it came out of stealth mode, FF has been involved in controversy.
First, it was lawsuits from vendors. Later, it was executives departing and its CEO and founder, Jia Yueting, seeing his fortune wiped out in China.
FF would often find itself with low funds despite having raised hundreds of millions of dollars.
It seemed 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 the relationship has proven to be extremely difficult.
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 through early 2018, and the remaining $1.2 billion over time.”
According to FF, the firm failed to make the additional payments and “tried to take control of the startup.”
They have reportedly been trying to prevent FF from seeking funding from other investors — leaving them without funds.
This has triggered layoffs, furloughs, and more people leaving the startup throughout the fourth quarter.
Earlier this year, Faraday Future finally announced that it settled the dispute with the investor, but it looked like it was too late. Most of its top executives had already left at that point, along with many key engineers.
In April, the company obtained a $225 million bridge loan, but it wasn’t clear where that bridge led to.
Now Pandaily reports that the company is initiating a restructuring that will “likely” involve a partnership:
“The company has stated on August 26 that it will likely restructure into a partnership with no additional details being offered. FF’s risk-taking CEO and founder is attempting to rectify both his personal debt and the company’s debt by setting up a trust fund to repay his creditors.”
They also reported that Jia Yueting is going to step down as part of the restructuring and sell some of his FF shares:
“The fund will be financed with Jia’s shares of FF which, following a future IPO, should net him and the company the funds needed to repay the mountains of debt. Jia has stated that he will take on the full responsibilities of paying back his debts.”
More details about a joint-venture partnership are expected to be announced.
I’ve heard several terrible stories from former employees who described a complete lack of vision and execution from YT.
Many of them blame FF’s failings on the CEO so it’s good news that he is finally stepping down, but I doubt much will come of it.
I’ve defended Faraday Future quite a few times when they were being ridiculed because I thought they had developed some pretty cool EV technology and they had some undeniable talent amongst their ranks.
But now a few years later, almost all that talent is gone and that technology is rapidly becoming outdated as other companies actually bring new products to market.
I’d be surprised if FF ever ends up bringing something to market.
FTC: We use income earning auto affiliate links. More.
Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.