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Faraday Future secures Hail Mary investment, and Jia Yueting takes over as CEO

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Meanwhile, recently departed CFO Stefan Krause has started his own competing EV company

Latest Consumer Technology Products On Display At CES 2017 Photo by Ethan Miller/Getty Images

Just weeks before Faraday Future was set to exhaust its cash supply, the company has secured a major new investment. Jia Yueting, a company co-founder and its main financial backer, told employees in a meeting last week that he has lined up a new round of funding, and that he is taking over as CEO of the beleaguered electric car company, multiple former employees tell The Verge. News of the meeting and potential investment was first reported by multiple Chinese outlets on Monday.

The details of the investment are still murky. It has been reported that Jia lined up at least $1 billion in exchange for shares of the company, though it’s unclear how many, or who’s buying. One former employee who is still close to Faraday Future tells The Verge that it could be in the 20 to 25 percent range, which would value the company at around $4 billion. Another speculates that the investment is coming from a group of companies, with Thai government-owned energy firm PTT — which already has EV contracts with six major auto manufacturers — floated as being involved.

Whatever the total investment, Faraday Future has already started to reach out to vendors to pay owed debts, which currently total over $100 million, according to multiple former employees with knowledge of the situation. In an email, a representative for Faraday Future said the company “cannot comment on these reports.”

While Jia is moving forward as the company’s CEO, he was already deeply in control of the company’s day-to-day operations, as The Verge recently reported in an in-depth investigation. This became especially true after Jia took up permanent residence in the US earlier this summer. Multiple former Faraday Future employees believe that he has remained stateside not only to run the company, but as a way to avoid paying numerous debts in China, as well as the turmoil at LeEco, the Chinese tech conglomerate he founded.

This summer, nearly $200 million of his personal assets were frozen by a court in his home country, and just last week Jia was placed on a nationwide “debtor blacklist” in China after defaulting on a $72 million debt that he owes to a Chinese securities group. Meanwhile, vendors have been camping out in LeEco’s lobbies waiting to be paid.

In addition to the funding news, Electrek is reporting that recently departed executives CFO Stefan Krause and CTO Ulrich Kranz are starting up their own electric car company called Evelozcity, which The Verge has confirmed. Krause and Kranz have already hired some of the top talent that recently left Faraday Future: lead designer Richard Kim, head of vehicle engineering Sohel Merchant, and vehicle line executive (and former Ford exec) Bill Strickland. The Verge has confirmed all three hires.

The duo of Krause and Kranz spent years working together at BMW, and came to Faraday Future earlier this year in an attempt to set the company on the right track. They resigned together in October after Jia stood in the way of efforts to fund the company or declare Chapter 11 bankruptcy, since both plans could endanger his position as the majority stakeholder of Faraday Future, multiple former employees recently told The Verge.

One month after they resigned, Faraday Future excoriated Krause and Kranz in a press release posted to the company’s website. The company claimed the two executives were fired, and that Krause had done illegal things in his time at Faraday Future, but offered no proof or explanation for either claim.

Faraday Future’s recent employee exodus has seeded other competitors with fresh talent, too. Another group has split off to start a new company called Indi EV, according to a new report from Jalopnik. According to a list of departed employees viewed by The Verge, Indi EV hired at least 10 people who have left Faraday Future since October. And according to that same list, at least a dozen people who left the company between September and November followed Tom Wessner, a founding executive at Faraday Future who left the company this fall, to EV startup Byton.