Seriously, How Much More Abuse Can Faraday Future Take?

Matt Posky
by Matt Posky
seriously how much more abuse can faraday future take

It’s been a while since we’ve discussed the ongoing plight of Faraday Future. While most of this year — and all of the last — was riddled with missteps from the automotive startup, we’ve taken a break from reporting on it. That wasn’t because its situation had improved, however. Oh boy, is that ever not the case.

Earlier this month, details emerged that the business was preparing to file for bankruptcy, followed immediately by the firm denying the validity of those claims. Then, news broke that Faraday’s chief financial officer, Stefan Krause, had quietly resigned in October — despite having been hired specifically to solve the company’s financial troubles back in March.

This got us wondering as to exactly how much more can go wrong before Faraday Future finally throws in the towel.

After lapsing on payments to the contractor responsible for building a billion-dollar factory in Nevada, Faraday eventually scrapped the plant. The new plan was to start smaller with a single model — the FF 91, which was showcased earlier this year as an impressive but incomplete prototype vehicle. In fact, the model suffered an embarrassing tech hiccup during a live broadcast when Jia Yueting, the company’s chief financial backer, attempted to use its automated parking system.

Jia has also suffered catastrophic financial problems. The situation is so dire that he was forced to resign as chairman of Leshi Internet after being unable to fulfill commitments (after branching the firm into several new business lines). The Chinese government has frozen over $182 million in remaining assets and he has been left to helm LeEco’s electric car business — and the struggling Faraday Future.

However, without solid financial backing, the company has been forced to seek investment opportunities elsewhere. While Stefan Krause was expected to be the tip of that spear, Jalopnik reported that the CFO decided to abandon his post on October 14th. Despite Jalopnik having its finger on the pulse of what is happening at Faraday better than most outlets, that news didn’t break until Friday morning. This is likely because FF is more secretive than a cat when company comes over.

It’s almost unbelievable to suggest this, especially considering how this year’s news has progressed, but Farday’s problems have — if anything — been underreported. In addition to nonpayment lawsuits with Electrical Services Solutions (for $580,000) and The Mill Group (for $1.8 million) from earlier this year, our own Bozi Tatarevic discovered that other civil suits have been quietly mounting in California.

The most interesting of these is with Schaffer’s Genuine Foods, which filed a $100,000 complaint against Faraday over unpaid catering fees.

Which brings us to the issue of bankruptcy. How can the company even maintain that filing for Chapter 11 isn’t its only course of action? In the last days of October, TMTPost issued a financing plan for Faraday that appeared legitimate. According to the document provided, Faraday was supposed to raise $150 million in conjunction with the bankruptcy filing. Afterward, new investors would inject $130 million to settle claims with “outstanding creditors” and eventually assume control of the company.

However, Faraday has categorically denied the authenticity of those documents.

Fine, let’s say they are fake. That doesn’t change everything else that has happened nor does it address the astronomical financial problems the company is currently facing. Jia may even face possible fraud charges in China for intentionally inflating Leshi’s earnings and operating details to investors. So, what’s the plan here? Is Faraday going to continue waiting for an investor willing to hand over $1 billion with Jia still in control of the company?

Faraday is hemorrhaging money, getting into all kinds of legal trouble, and losing employees faster than it can take them on. Maybe it should take a look at those fake bankruptcy documents and put them into action.

[Image: Faraday Future]

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4 of 16 comments
  • Inside Looking Out Inside Looking Out on Nov 10, 2017

    "We are doing these things not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone." Easy is to sit in armchair and play smarta$$. The road to success is paved by failures.

    • SaabsIKindalikethem SaabsIKindalikethem on Nov 11, 2017

      Easy to quote Kennedy from your armchair. FFS, they can't even pay the caterer - There is NO future in this boondoggle. Success has many fathers, failure is an orphan

  • Tstag Tstag on Nov 13, 2017

    According to Autocar TATA motors are about to spend 900 million USD investing in Faraday Future. I'm guessing that might buy them most of the company....

    • SCE to AUX SCE to AUX on Nov 13, 2017

      This would be the definition of throwing good money after bad.

  • SCE to AUX I like the concept, but $6k just gets you started. I'd have to outsource the bodywork, which is a real problem on a project like this.Still, the result would be a fun vehicle that reflects what many people want today - a small unbloated utility truck.
  • TheDoctorIsOut Try and keep it as light and focused as it always has been and as analog as possible. For those who can appreciate it (and fit into it) there’s still something special about a car that can be driven at 90% of its potential for most of the daily drive.
  • SCE to AUX Let it die with dignity - no electrification. That would kill the spirit of the original.Mazda needs to think about survival and market share, not tinker with a niche car with waning sales, or dying on Wankel Hill.Maybe their body and paint engineers could help Tesla once Mazda folds.
  • Lou_BC H-E-L-L-C-A-T
  • EBFlex "EBFlex speaks more truth."It's sometimes a burden being right all the time.