Faraday Future CEO Defies Order to Return to China

Matt Posky
by Matt Posky
faraday future ceo defies order to return to china

Founder of the debt-laden technology firm LeEco has shirked orders from Chinese authorities to return to the country before the end of 2017, saying he needed to stay within the United States to fundraise for Faraday Future. Last week, the Beijing branch of the China Securities Regulatory Commission issued a notice ordering Jia Yueting to return to China to face the staggering debt attached to his various businesses and protect investors’ rights.

However, he claims he’s making too much headway with efforts to keep electric vehicle startup Faraday Future from sinking deeper into the toilet to head back to China. Instead, he has requested that his brother, Jia Yuemin, meet the regulator face-to-face last Friday to provide a report in response to the notice.

“I am deeply sorry and blame myself for the negative impact of LeEco’s debt crisis,” Reuters reported Jia Yueting as saying on his official WeChat account on Tuesday. “The fundraising for Faraday Future in the United States is making significant progress and there are many tasks I need to push forward in order to ensure the production and timely delivery of the FF91.”

Still, Faraday’s ability to bring its much-hyped EV to market continues to look less and less likely. The company’s financial issues are well-documented and nothing but Jia’s promises have offered any indication that the situation might be improving. LeEco previously worked jointly on an electric vehicle with FF. But its own explosive expansion into everything high-tech is the primary reason for its defaulting on payments. At its peak, LeEco owed creditors around 10 billion yuan — or $1.54 billion.

Likewise, Faraday Future also had numerous debts that went unsettled last year. This has resulted in the firm scaling back its production efforts immensely, despite big promises made in 2016. Jia has since assured the public that the capital necessary to save the automaker is all but secured.

He also points to a single late payment in July as the impetus of LeEco’s cash-flow problems, suggesting it led to the freezing of his assets and prompted a barrage of early loan recoveries. He said “false and malicious” reports have impacted the business as well. Jia was placed on an official blacklist of debt defaulters in early December, a move taken by the Chinese courts to pressure people and entities to repay outstanding debts.

[Image: LeEco]

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5 of 6 comments
  • 1500cc 1500cc on Jan 02, 2018

    I wonder who all these investors are ... it boggles the mind that anybody could expect FF to be successful in building and selling electric cars. Selling bonds to Venezuela would be a better investment.

    • See 1 previous
    • Wsn Wsn on Jan 03, 2018

      It boggles my mind that anybody could expect Tesla to be successful. Sure it's already successful in raising money, but operationally? No way.

  • Twotone Twotone on Jan 02, 2018

    "Return to China to face the staggering debt..." really means "Have all your assests seized and spend the rest of your life in some remote prison camp never to be seen again." Similar to the VW executive who made the mistake of changing planes in the US from his Caribbean holiday and heading home to Germany. He won't be seeing home for a long time.

    • Detroit-Iron Detroit-Iron on Jan 03, 2018

      Yeah that reminded me of Mark Whitacre and the lysine price fixing. He enticed them to Hawaii for a golf trip and the skels (not least of which was Mark himself, if you have ever seen 'The Informant') involved joked on tape that they shouldn't be talking about it in the USA because the FBI might be listening.

  • SCE to AUX Toyota the follower, as usual. It will be 5 years before such a vehicle is available.I can't think of anything innovative from them since the Gen 1 Prius. Even their mythical solid state battery remains vaporware.They look like pre-2009 General Motors. They could fall hard.
  • Chris P Bacon I've always liked the looks of the Clubman, especially the original model. But like a few others here, I've had the Countryman as a rental, and for the price point, I couldn't see spending my own money on one. Maybe with a stick it would be a little more fun, but that 3 cylinder engine just couldn't provide the kick I expected.
  • EBFlex Recall number 13 for the 2020 Explorer and the 2020 MKExplorer.
  • CEastwood Every time something like this is mentioned it almost never happens because the auto maker is afraid of it taking sales away from an existing model - the Tacoma in this instance . It's why VW never brought the Scirrocco and Polo stateside fearful of losing Golf sales .
  • Bca65698966 V6 Accord owner here. The VTEC crossover is definitely a thing, especially after I got a performance tune for the car. The loss of VTEC will probably result in a slower vehicle overall for one reason: power under the curve. While the peak horsepower may remain the same, the amount of horsepower and torque up to that peak may be less overall. The beauty of variable cam lift is not only the ability to gain more power at upper rpm’s on the “big cam”, but the ability to gain torque down low on the “small cam”. Low rpm torque gets the vehicle moving and then big horsepower at upper rpm’s gains speed. Having only one cam profile is now introducing a compromise versus the VTEC setup. I guess it’s possible that with direct injection they are able to keep the low rpm torque there (I’ve read that DI helps with low rpm torque) but I’m skeptical it will match a well tuned variable lift setup.