Faraday Future receives new Hong Kong investment to resume operations
Faraday Future (FF), one of the most ambitious electric vehicles start-ups rivalling Tesla, has recently secured a $1.5 billion investment from a Hong Kong-based investor, $550 million of which has already been transferred. The investment comes at a perfect time for the high-tech car maker, struggling with debt, unpaid bills and lawsuits, reaching a critical bankruptcy point last January. The company’s founder and CEO, Jia Yueting, has also been facing charges for hundreds of millions of dollars in unpaid debts to Chinese companies.
The latest investment will provide cash for the company, enabling them to repay their debts. FF will also host a suppliers’ summit at its Los Angeles headquarters, showing its future plans and funding. Several suppliers such as Bosch, LG Chem, Fuji Technical & Miyazu, and Velodyne are expected to attend the gathering.
According to the head of supply chain, Pablo Ucar, “the goal was for suppliers to walk away with renewed confidence about their plans and funding”.
While it was revealed that Hong Kong based investors are providing the cash, additional details and identity have not been released yet. FF received $550 million of the investment, with $300 million transferred in early December, last year, and an additional $250 million, expected this February. The remaining $950 million will be transferred after the company fulfils undisclosed project milestones.
FF has previously attempted to raise new funds, after successfully managing bankruptcy threats last year. The company hired a former BMW CFO, Stefan Krause, who launched a global campaign to raise $1 billion. However, it did not reach its goal, leading the executive to leave FF and pursue his own electric-car start-up, resulting in an intellectual property lawsuit.
Spending the new money
In addition to paying off its debt and bills, FF will also resume its car production business. The company plans to manufacture a new, mass-market model, 1,000-horsepower FF91 electric vehicle, which has been stagnating in beta, since last year. The current prototype versions still need to reach critical development milestones, like physical crash-testing. FF will speed up production and eventually create a production version of the car by the end of 2018.
They also plan to launch a second vehicle, called FF81, targeting the Chinese mass-market. The early sketches of the new model, presented to more than 100 suppliers, look futuristic and SUV-like. The FF81 will be a smaller and more affordable version of the FF91, whose unofficial release is planned for the upcoming Beijing Auto Show.
FF also intends to fully refurbish the factory it is currently leasing in central California. Last summer, they announced plans to set up an inaugural factory in Hanford, California, between Los Angeles and San Francisco. They previously initiated an assembly plant project in North Las Vegas, which was abandoned after missing millions of dollars in payments to the construction partner AECOM. The new project will include a new contractor for the Hanford site and will begin within the next 30-60 days. It will feature installing the robotics and assembly line equipment purchased for the massive Las Vegas factory, with a new contractor for the Hanford site.
The firm’s vice president of global manufacturing stated in a statement, that the property has been completely vacated since February 1, allowing the company to begin construction by the end of the first quarter. The executive additionally teased information that the Hanford factory will be completely finished by the end of 2018.[/vc_column_text]
“We are well into the process of design and permitting and have begun planning our recruitment cadence. As of February 1, the property has been completely vacated, so we will move forward on construction and equipment by the end of the quarter.”