The auto executive who was brought in to save Faraday Future has resigned. Stefan Krause, who came to the floundering automotive startup from BMW after spending years at Deutsche Bank, actually left the company in October, according to Jalopnik.
Krause is not alone. Ulrich Kranz, the company’s CTO and another former BMW executive who joined in July, is leaving or has already left the company, The Verge has learned. And the same goes for former Ford Fusion program leader Bill Strickland, who was in charge of running Faraday Future’s vehicle manufacturing line. Representatives for Faraday Future declined to comment.
Krause is a big loss as he was the one courting investors to save the company, which has struggled mightily in 2017. He was acting as both CFO and COO, and had established multiple “exit” and “investment” routes for the company, including discussions with Indian automotive manufacturer Mahindra & Mahindra that involved a potential acquisition of parts of Faraday Future’s technology, multiple sources with direct knowledge of the situation have told The Verge. Faraday Future declined to comment.
It was also Krause who made the move to use the company’s Los Angeles headquarters as collateral to raise $14 million to pay for the lease on a new manufacturing facility in California — a move that was necessitated after Faraday Future abandoned its plans to build a $1 billion factory in Nevada earlier this year. As one former employee put it, “he bet the house. Literally.”
The new departures come after two of Faraday Future’s founding executives left the company in recent months, both once top men at Tesla. A slew of employees followed, including many who worked directly on the company’s car, the FF91. The company, which at the turn of the year employed around 1,500 people, has fewer than 1,000 employees working for it, according to court documents seen by The Verge.
Faraday Future emerged out of stealth mode in 2015, promising to deliver an electric vehicle with the performance of a Tesla and advanced technology like autonomous driving. It also teased the idea of eventually offering its cars as part of a subscription service, a twist on the ride-sharing model that automotive manufacturers and technology companies alike have begun working toward.
But the company, backed in large part by Jia Yueting, the former CEO of Chinese technology conglomerate LeEco, started running out of money in 2016. Payments from YT, as he’s known, reportedly slowed, and his assets were frozen in China earlier this year. He has since slipped from 31st to 1,978th on the Hurun Report, a list of China’s wealthiest citizens.
Faraday Future never secured any major funding from other sources mainly because YT — the company’s largest shareholder — didn’t want to relinquish his tight grip over the company, a number of former employees have told The Verge.
As the coffers dried this summer, and the company turned its sights to finding and prepping a new factory, manufacturing work has stalled. “I know talking to people who are still there now that work is just halted, while they’re waiting. There’s lots of planning but there’s no further progress being made,” one former employee who recently left the manufacturing team says, which the company confirms.
“They’re basically not doing any more work because they’re waiting to see what the next step is going to be in terms of funding,” this person says. “In short, they’re in a holding pattern.”
Before Krause left, Faraday Future confirms that it had scaled back its targets to just 10,000 units of the FF91 per year, with production beginning in late 2018 — a far cry from the 13 models and millions of units it once sought to produce.
With Krause gone, it’s now even less clear where any new funding might come from, or who will secure it. It may not have mattered, though, this former employee says. “I’d say that Stefan, he was never really in control as long as YT was there.”
Earlier this week, Jalopnik reported documents have surfaced that hinted that the company may be exploring bankruptcy. The company denied the claims, calling the documents fake.