Faraday Future just became a listed company


Electric Vehicle Startup Faraday future is a publicly traded company.

That’s ok, I’ll give you a moment. I have reported from Faraday Future for four years and it has even amazed me a few times in recent weeks. But it’s true: today, startup shares began trading on the Nasdaq stock exchange, and a fresh billion dollars were poured into its battered war front.

Electric vehicle companies are public left and right thanks to the growing popularity of special purpose vehicles (you can read great explanation here). So are companies that supply some of the new technologies that enable the use of electric cars, such as lithium-ion battery manufacturers, as well as other similar industries, such as autonomous vehicle starters and lidar sensor manufacturers.

But none of these companies flirted with oblivion so much about Faraday Future. Faraday Future walked to the brink of ope in recent years, the man of an extravagant billionaire founder, Jia Yueting, a man who himself was expelled from China to escape a huge amount of debt, and somehow lived to tell the story.

A a lot happened along the way. After its founding in 2014, Faraday Future was mistaken for a secret front-end operation on Apple’s self-driving car project. It unveiled a static concept car at the 2016 Consumer Electronics Show announced its intention to be as disruptive as the iPhone (when Jia compared Apple to Hitler – no, Really). It returned to the fair the following year and presented a real by electric vehicle only all sorts of matters go wrong, and then suppressed the company that helped organize the event. It announced a $ 1 billion plant in the Nevada desert that was never built (after current options, including Rivian’s current plant in Illinois, were exceeded).

Then the real problems began. Jian’s sincere spending – he poured $ 900 million of his own funds, most of the loans he never repaid in China, into Faraday Future by 2017. electric SUV. But he had difficulty getting other investors. He doubted the idea of ​​relinquishing all control of the company, and it scared anyone with pockets deep enough to raise the kind of capital needed to build a factory and make a car on a scale.

So in late 2017, Faraday Future ran torn. Its bank accounts were only a few million dollars. Bored Jia, executives hired from Tesla, Apple and other big companies began to escape. The CFO, brought in to save the company, left later in the year after Jia refused his proposal to restructure Faraday Future in bankruptcy. (That director, along with a few others who left Faraday Future, founded the company, which is now Canoo.)

financial card house that Jia had built the Faraday Future seemed ready to collapse. Then at the end of 2017 the company received a mysterious rescue line. Like Limit reported in April 2018, the money came from the Chinese real estate conglomerate Evergrande through several offshore companies. Evergrande promised a total of $ 2 billion – $ 800 million up front and the rest to be paid in installments. Faraday Future was saved.

Until it was. Jia spent her money faster than Evergrande expected. Evergrande agreed to give Faraday Future an advance on the remaining investment, but only if Jia relinquished control. Jia did this technically, but he only transferred control of the shares to the right-wing woman’s daughter, Faraday Future VP Chaoying Deng (whom I discussed here) The 2017 survey).

Evergrande was dissatisfied with this. Both sides spent months fighting in a Hong Kong court over a dispute. At the same time, Faraday Future was again basically penniless. It carried on hundreds of workers and laid off many of them. Most of the top leaders who had caught on eventually, including Jian’s last the remaining founder. Faraday Future eventually lived with Evergrande at the end of 2018 and spent much of 2019 in a kind of dormancy, although the production of cash still required a few radical measures to turn the lights on. by selling its own headquarters.

In early 2019, Faraday Future made a few decisions that are undoubtedly the reason it survived long enough to take advantage of the SPAC boom and become a public company. First, it started working a restructuring company run by bankruptcy gurus. In partnership with this company, Faraday Future persuaded many suppliers who owed money to exchange their receivables for trust shares that would be paid if the startup raised money. It also helped refinance part of the startup debt.

It then hired another former BMW manager, Carsten Breitfeld, who used to drive the BMW i8 program. Breitfeld became CEO (as well as a kind of adult in the room), and since then he has been the face of startup fundraising.

Finally, Jia filed for bankruptcy to pay $ 3.6 billion his personal debt in China. The manner in which this was done was crucial to Faraday Future’s current assets. Jia invested almost all of her control in the startup in a trust that her own creditors now own – just like the way Faraday Future settled its debt with suppliers. This means that he no longer has the same dictator control over the company as he once enjoyed.

Faraday Future survived from 2020 in part a $ 9 million loan from Paycheck Protection and ended the year only a million dollars in the bank. But by that time, it had already been in talks with Property Solutions Acquisition Corp., which had originally merged with a real estate company. They announced the merger in January 2021.

Now that Faraday Future is listed on the Nasdaq, the launch company says it will take a year to get the electric SUV into production. The company has big plans after that – it’s still trying to be the big disruption it claimed to be at CES 2016 – but it can’t break them until it gets its first car out the door.

Or maybe it will. Faraday Future has so far survived so many immortal brushes, and the financial markets are currently so receptive to young electric vehicles with no income that it’s actually hard to imagine how things could really go wrong in the near future. But if you have to learn one of the first seven years of Faraday Future, then you always have to wait for the unexpected.

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