Skip to main content

Filed under:

Faraday Future: the rise and fall (and rise) of the electric car startup

In early 2015, a small California startup generated a ton of buzz as it stole talent away from Apple, Tesla, SpaceX, and many of the world’s most prominent automakers. The hype reached such a fever pitch that, at one point, some people even believed it was Apple’s self-driving car division masquerading as an up-and-comer.

In reality, the mysterious company turned out to be Faraday Future, an automotive startup funded by Chinese billionaire (and LeEco founder) Jia Yueting. Faraday Future made big claims about “reformatting” the auto industry with a tech-forward luxury electric SUV that would beat the fastest Tesla in a drag race. It announced plans to build a $1 billion factory in the Nevada desert, and it promised that its cars would create a “third internet living space” when they eventually hit the road.

Building a car company from scratch isn’t easy — just look at how much effort it took to get Tesla to where it is today — and by all accounts, Jia didn’t make it any easier for Faraday Future. The company ran into a number of financial and organizational problems, lost executives and employees, and the dream of a factory in the desert along the way. What began as a story about an American automotive startup has turned into one about a troubled company with many ties to China, which deepened as Faraday Future came up against its biggest crisis yet.

Ultimately, Faraday Future treaded water long enough to be saved by the boom in special purpose acquisition company mergers that swept the EV space in late 2020 and early 2021, and is now on its way to becoming a publicly-traded startup. The Verge has followed the repeated rise and fall of Faraday Future since the beginning and uncovered many of the hows and whys that explain where the company is today.

  • Sean O'Kane

    Nov 15, 2021

    Sean O'Kane

    Faraday Future launches investigation into financial fraud allegations

    Faraday Future is launching an investigation into recent allegations of financial fraud at the startup, including claims from a recent short-seller report by J Capital. The EV startup’s board of directors has formed a “special committee of independent directors,” which has hired a law firm to perform the investigation.

    J Capital had accused Faraday Future of lying about the number of reservations it had collected for its ultra-expensive electric SUV, the FF91. It also accused Faraday Future’s founder Jia Yueting of unfairly benefitting from the startup’s recent public listing, which it accomplished after merging with a special purpose acquisition company.

    Read Article >
  • Sean O'Kane

    Aug 26, 2021

    Sean O'Kane

    Palantir invested $25 million in Faraday Future

    Data-mining firm Palantir invested $25 million in Faraday Future shortly before the electric vehicle startup became a publicly traded company in July, according to a previously unreported Securities and Exchange Commission (SEC) document filed late last week.

    In addition, Faraday Future signed a commercial contract to use Palantir’s software, according to one of Palantir’s most recent SEC filings. Neither company disclosed how much Faraday Future is paying, though Palantir’s filing notes the contract will last between four and six years. Representatives for both companies did not immediately respond to requests for comment.

    Read Article >
  • Sean O'Kane

    Jul 22, 2021

    Sean O'Kane

    Faraday Future just became a publicly traded company

    Image: Nasdaq

    Electric vehicle startup Faraday future is a publicly traded company.

    It’s okay, I’ll give you a moment. I’ve been reporting on Faraday Future for four years and it has even stunned me a few times in recent weeks. But it’s true: today, the startup’s shares began trading on the Nasdaq stock exchange, and a fresh $1 billion was dumped into its battered war chest.

    Read Article >
  • Sean O'Kane

    Apr 19, 2021

    Sean O'Kane

    Faraday Future was investigated by the Department of Labor in 2020

    Photo by Sean O’Kane / The Verge

    Faraday Future was investigated by the Department of Labor in 2020, though the electric vehicle startup says the matter was “resolved,” according to a previously unreported passage in a recent regulatory filing.

    The startup didn’t say what the investigation was about or how much it paid to resolve the legal matter. Faraday Future’s former chief lawyer has claimed in a lawsuit that the company was previously inspected by the Department of Homeland Security’s United States Citizenship and Immigration Services division in 2018, though the startup denied this in court filings. A spokesperson for Faraday Future declined to comment on the investigation.

    Read Article >
  • Sean O'Kane

    Jan 28, 2021

    Sean O'Kane

    Faraday Future is going public and raising $1 billion

    Photo by Sean O’Kane / The Verge

    Faraday Future is going to become a publicly traded company on the Nasdaq stock exchange and is raising around $1 billion in the process.

    The troubled EV startup announced Thursday that it is indeed merging with special purpose acquisition corporation (or SPAC) Property Solutions, as first reported by Bloomberg earlier this month.

    Read Article >
  • Sean O'Kane

    Jan 19, 2021

    Sean O'Kane

    Faraday Future’s best shot at redemption may be a SPAC

    Photo by Sean O’Kane / The Verge

    Despite a whirlwind of electric vehicle SPAC mergers in the last few months, there’s still one startup flying solo that’s arguably the best-positioned. Yes, Faraday Future is still on the market — though maybe not for long.

    Sure, Faraday Future is distressed and its electric SUV is outrageous, but it developed valid technology over the last few years that is further along than what some competitors have. It will take a lot of money to get that vehicle over the proverbial finish line. Lucky for Faraday Future, though, money is now incredibly easy to come by.

    Read Article >
  • Sean O'Kane

    Jul 24, 2020

    Sean O'Kane

    Faraday Future founder’s bankruptcy spiked a potential deal in the Middle East

    Illustration by Alex Castro / The Verge

    Late last year, Faraday Future was supposed to meet with a Middle East sovereign wealth fund to discuss an investment that could have helped pull the struggling EV startup out of its perpetual financial nosedive. But the wealth fund retracted the invite shortly after Faraday Future founder Jia Yueting filed for bankruptcy to resolve billions of dollars of personal debt, according to a previously unreported transcript of one of the Chinese tycoon’s Chapter 11 proceedings.

    “We were invited by a government entity to go to the Middle East to a sovereign fund, and the minute that we filed the Chapter 11 case and it became clear the financial issues, Faraday was uninvited,” Jia’s lawyer told a judge in December 2019.

    Read Article >
  • Sean O'Kane

    May 22, 2020

    Sean O'Kane

    Judge approves Faraday Future founder’s personal bankruptcy plan

    2013 Global Mobile Internet Conference
    Photo by Visual China Group via Getty Images/Visual China Group via Getty Images

    Seven months after he filed for Chapter 11 bankruptcy to deal with $3.6 billion in personal debt, the reorganization plan laid out by Jia Yueting — the tycoon founder of troubled EV startup Faraday Future — has been approved by a judge.

    In overly simple terms, the majority of the people and companies he owes money to — largely thanks to the collapse of LeEco, the overly-leveraged tech conglomerate he built his fortune with in China — have agreed to swap their debt claims for pieces of Jia’s ownership stake in Faraday Future. They now only have a shot of being made whole if and when the struggling startup successfully completes a public listing on a major stock exchange.

    Read Article >
  • Sean O'Kane

    Apr 20, 2020

    Sean O'Kane

    Faraday Future gets a $9 million government pandemic loan

    Photo by Sean O’Kane / The Verge

    Electric vehicle startup Faraday Future has obtained a $9,167,800 loan from the Small Business Association’s Paycheck Protection Program (PPP), which was recently launched to help small businesses keep people employed during the COVID-19 pandemic, the company tells The Verge.

    That’s close to the $10 million maximum allowed in the program, and the loan will be 100 percent forgiven as long as Faraday Future uses it for payroll, interest on mortgages, rent, or utilities, and doesn’t lay off any of the 400 or so employees who are still there for the next eight weeks (or rehires any who were recently let go). News of the loan was first reported in China by state-funded outlet The Paper.

    Read Article >
  • Sean O'Kane

    Dec 18, 2019

    Sean O'Kane

    DOJ intervenes in Faraday Future founder’s bankruptcy after ‘dishonest behavior’

    Letv Launches EUI System In Beijing
    Photo by Visual China Group via Getty Images/Visual China Group via Getty Images

    The Department of Justice has accused Faraday Future founder Jia Yueting of “engaging in dishonest behavior” during his Chapter 11 bankruptcy proceedings, and it has filed a motion to appoint a new trustee to take control of the Chinese billionaire’s estate.

    The new motion, if approved, could dramatically change the course of Jia’s bankruptcy case, which involves billions of dollars of debt owed to more than 100 creditors in China, and which has been hotly contested in the two months since he filed. While Jia claims his bankruptcy does not directly involve Faraday Future, he has claimed that a speedy outcome is necessary in order for the EV startup to raise the $850 million it so desperately needs to finally put its first vehicle into production late next year.

    Read Article >
  • Sean O'Kane

    Oct 30, 2019

    Sean O'Kane

    Faraday Future’s still haunted by the past of its billionaire founder

    Faraday Future, once the most hyped electric vehicle startup following in Tesla’s wake, is now known for its money troubles, if it is known at all. Flashy hires — from SpaceX, Tesla, Apple, and Ford — have mostly moved on. The $2 billion it has spent to develop a luxury SUV hasn’t paid off; the vehicle is still not in production. This is all thanks to the company’s founder, a man who ran from China in 2017 to escape billions of dollars of debt, only to declare bankruptcy in the US this month: former Faraday Future CEO Jia Yueting.

    Smart money has the company on death watch. But Faraday Future is still alive, and its new CEO would like to explain why. 

    Read Article >
  • Sean O'Kane

    Oct 14, 2019

    Sean O'Kane

    Faraday Future founder files for Chapter 11 bankruptcy

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

    Faraday Future’s founder and former CEO Jia Yueting has filed for Chapter 11 bankruptcy in Delaware court in a bid to satisfy his myriad debts in China. The Chinese tycoon claims he still owes around $3.6 billion to more than 100 creditors, thanks, in large part, to the collapse of LeEco, the tech conglomerate he founded there. The bankruptcy filing marks a major turn in the story of Jia’s prolific history of taking on debt, which led to him being named to a national debtor blacklist in China and sparked his move to the United States in 2017.

    Before proceeding in court with Chapter 11, though, Jia is offering to satisfy those debts through a trust backed by the value of his ownership stake in Faraday Future. This trust will only pay out to creditors if and when the startup goes public. (This resembles but is separate from the plan Faraday Future laid out earlier this year for suppliers who are owed money, which was put together by Birch Lake Associates, a Chicago-based restructuring firm.)

    Read Article >
  • Sean O'Kane

    Sep 3, 2019

    Sean O'Kane

    The man responsible for the BMW i8 is taking over as CEO of Faraday Future

    Carsten Breitfeld, the man who ran the BMW i program and brought the i8 supercar into the world, is taking over as CEO of troubled EV startup Faraday Future, the company announced on Tuesday. Jia Yueting, Faraday Future’s founder, has resigned the CEO role and will become the company’s “chief product and user officer.” Faraday Future is also seeking a new “global chairman” to help the company move forward.

    Breitfeld also helped found Chinese EV startup Byton and most recently served as the CEO of another Chinese EV company known as Iconiq Motors. “I am thrilled to accept the role of CEO and look forward to powering FF to its next stage of success,” said Breitfeld in a statement. “One of the main reasons I joined FF was YT and his vision for how the mobility eco-system will transform the industry, and FF’s industry-leading products and technology, as well as their recently-implemented global partnership program.

    Read Article >
  • Sean O'Kane

    Jul 2, 2019

    Sean O'Kane

    EV startup Rivian has poached dozens from Ford, McLaren, Tesla, and Faraday Future

    Photos by Sean O’Kane / The Verge

    Since coming out of stealth mode last year, Michigan-based EV startup Rivian has announced big investments from Amazon and Ford. At the same time, the startup has more than doubled in size since last spring, and now employs 750 people. The startup has hired dozens of employees from Ford, McLaren, and Tesla, according to hundreds of LinkedIn profiles viewed by The Verge, though the biggest contributor is a fizzling would-be rival, Faraday Future. Rivian has hired about 50 former Faraday Future employees, including at least 34 since the struggling startup put workers on furlough late last year.

    In addition, The Verge has learned Rivian recently appointed its first chief technology officer: Mike Bell, a longtime Apple VP who helped bring the iPhone into the world.

    Read Article >
  • Sean O'Kane

    May 1, 2019

    Sean O'Kane

    Faraday Future is working with ‘a bankruptcy legend’ to stave off collapse

    Beleaguered electric vehicle startup Faraday Future is restructuring in order to survive. The company announced a new deal on Monday that could chart a path forward. The startup has been without a main financial backer for months, is unable to bring back hundreds of employees still on unpaid leave, and recently sold its own headquarters to generate cash. But its new path, financial experts tell The Verge, resembles an out-of-court bankruptcy.

    The would-be automaker announced that Chicago-based Birch Lake Associates will provide the startup with bridge financing, or a short-term loan, of “up to $225 million.” Of that potential total, $75 million will come in the form of “senior secured” debt financing, meaning the loan from Birch Lake must be paid back before any other suppliers or contractors receive money owed by Faraday Future.

    Read Article >
  • Sean O'Kane

    Mar 25, 2019

    Sean O'Kane

    Faraday Future strikes deal to make cars in China with mobile gaming company

    Photo by Phil Esposito / The Verge

    Troubled electric car startup Faraday Future has received another surprise lifeline in the form of a new 50/50 joint venture partnership with Chinese online video game company The9, the EV company announced Sunday. The9 says it’s willing to contribute up to $600 million to the overseas joint venture, and Faraday Future has promised to use that money to make a new car in China (and for the Chinese market) by 2020 called the V9.

    The new car will be based on the FF91, the ultra-luxury electric SUV that Faraday Future debuted at CES 2017, and the one that it’s spent the last few years struggling to get into production. The9 and Faraday Future claim they will be able to make 300,000 cars per year, though they have not shared where they would be built.

    Read Article >
  • Sean O'Kane

    Mar 20, 2019

    Sean O'Kane

    Faraday Future just sold its headquarters to help keep the company alive

    Image: Faraday Future

    Faraday Future has sold its Los Angeles headquarters in a move to help fill the EV startup’s exhausted coffers, according to property documents obtained by The Verge. A subsidiary of New York-based real estate firm Atlas Capital purchased the headquarters on March 8th and immediately began leasing the building back to Faraday Future for an undisclosed amount.

    The documents did not reveal how much Faraday Future received in the sale of its headquarters, which consists of two buildings just off of South Figueroa Street in the city of Gardena, California, about 15 miles from downtown Los Angeles. One former employee familiar with the sale pegged the number at around $10 million. It could be higher; Faraday Future took a $17 million loan against its headquarters in May 2018, which it has since repaid, according to the lender iBorrow. The EV startup also took a $14 million “rescue loan” against the headquarters in July 2017 during the early stages of a separate financial crisis. The company finished paying back that loan in January 2018. It bought the buildings in 2014 for $13.2 million.

    Read Article >
  • Sean O'Kane

    Feb 28, 2019

    Sean O'Kane

    Lawsuits are piling up against Faraday Future as it struggles to find money

    In the time since EV startup Faraday Future first announced drastic layoffs and salary cuts last October, another new challenge has emerged: 11 new lawsuits filed against the company by suppliers and contractors, nearly all of them previously unreported. In total, the companies are seeking nearly $80 million in owed payments, damages, and fees from Faraday Future.

    The lawsuits all allege that Faraday Future stiffed these companies shortly after signing contracts with them. It’s a claim that’s been made about Faraday Future in the past, like when it reportedly owed some $100 million in unpaid bills during an previous financial crisis in 2017. But viewed together, the new lawsuits provide unprecedented clarity about how much the startup currently owes, and to whom. Faraday Future’s chief financial officer Michael Agosta admitted in court documents last year that the startup owed suppliers “more than $59 million” as of October 2018. The new lawsuits suggest that total number might now be much higher. (A representative for Faraday Future did not respond to a request for comment in time for publication.)

    Read Article >
  • Sean O'Kane

    Feb 27, 2019

    Sean O'Kane

    Faraday Future says hundreds of furloughed employees won’t return to work next week

    Photo: Faraday Future

    EV startup Faraday Future has told employees on “furlough,” or unpaid leave, that it can no longer bring them back to work on March 1st as planned, according to an internal email sent Tuesday and obtained by The Verge. The company says it is extending the furlough, but did not say for how long. These employees have been on furlough since December, with benefits.

    Faraday Future has been searching for new funding since last October, when it got into an ugly public fight with its biggest outside investor, Chinese real estate giant Evergrande. Evergrande committed $2 billion to the California-based EV startup at the end of 2017, but Faraday Future spent the first $800 million installment by mid-2018. When Faraday Future asked Evergrande to advance about half of the remaining $1.2 billion, Evergrande ultimately refused, locking the two in a power struggle that left the startup nearly out of money.

    Read Article >
  • Sean O'Kane

    Dec 31, 2018

    Sean O'Kane

    Faraday Future gets a lifeline as it settles months-long battle with Chinese investor

    Photo: Phil Esposito / The Verge

    The war between electric car startup Faraday Future and its main investor, Chinese real estate conglomerate Evergrande, appears to be over. Evergrande announced on Monday that it has agreed to restructure its $2 billion investment in Faraday Future. The conglomerate will walk away with full control over Faraday Future’s efforts in China, and both sides will drop all ongoing litigation against each other, according to a release posted to the Hong Kong Stock Exchange.

    Faraday Future will receive a bridge loan from Evergrande to “overcome [the startup’s] cash flow difficulties,” spokesperson John Schilling said in an email. Those difficulties involve Faraday Future almost completely running out of cash over the last few months, which resulted in massive layoffs, furloughs, and the loss of a number of key executives, including one of the company’s three co-founders.

    Read Article >
  • Sean O'Kane

    Dec 14, 2018

    Sean O'Kane

    Federal court freezes Faraday Future CEO’s ownership stake, California mansions

    Illustration by James Bareham / The Verge

    A federal US District judge in California has temporarily frozen Faraday Future CEO Jia Yueting’s ownership stake in the company, and put a protective order on the mansions he owns in California, according to new court documents filed Thursday. It’s the second freeze placed on Jia’s ownership stake in the company in the last two weeks. The decision comes at a time when the EV startup is nearly completely out of cash after a months-long clash with its main financial backer, Chinese real estate conglomerate Evergrande, that has resulted in hundreds of layoffs and furloughs.

    The new freeze is a result of a lawsuit filed earlier this week in the central district court of California by a Chinese company called Shanghai Lan Cai Asset Management Co, Ltd. The company claims Jia never paid back a 50 million yuan (or about $7 million) loan that was given to his other company, the streaming service LeTV, in late 2016.

    Read Article >
  • Sean O'Kane

    Dec 8, 2018

    Sean O'Kane

    Faraday Future CEO’s long trail of debt is finally catching up to him

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

    Jia Yueting, the CEO and a co-founder of troubled EV startup Faraday Future, has a notorious history with money. While his rise to fame and fortune in China was built partly around his vision — he started a streaming company in 2004 called LeTV, well before Netflix shifted away from DVDs — it was also built on financial debt. For years, he followed a relatively simple formula. He found success with LeTV, borrowed against that success to try new things under the umbrella of “LeEco,” then borrowed against those ventures to do even more, stacking up debt along the way. With China’s economy booming at the time, and a large shadow banking system emerging that made borrowing easy, he was off to the races.

    More than a decade later, Jia finds himself living in a mansion — one of a few that he owns, in fact — on the coastal cliffs of Rancho Palos Verdes, California. While that might sound like the dream life, Jia isn’t there out of choice. He’s been living there since last summer in self-exile, because that long trail of debt that he built up in China is finally catching up to him. That seems especially true this week, as the LeTV family of companies continued down the path of financial ruin, and a new court case (in the Caribbean, of all places) introduced a potential new threat to his status as the controlling figure of Faraday Future.

    Read Article >
  • Sean O'Kane

    Dec 4, 2018

    Sean O'Kane

    Faraday Future furloughs hundreds more employees as it runs low on cash

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

    Electric car startup Faraday Future plans to furlough hundreds more employees as a result of an ongoing cash crunch during a battle with its main investor, the company announced on Twitter today. The startup originally placed hundreds of employees on furlough, or unpaid leave, in October, reducing its US headcount from around 1,000 to about 600. At least 250 more employees are being furloughed today, multiple sources tell The Verge.

    Faraday Future had laid off workers and cut salaries before the furloughs in an attempt to claw back expenses as it waits out an arbitration case against its financial backer and biggest shareholder, Chinese real estate giant Evergrande. It lost a number of key members from the leadership team in October, including one of three co-founders, and former Tesla and GM executives.

    Read Article >
  • Sean O'Kane

    Nov 30, 2018

    Sean O'Kane

    Faraday Future dealt potentially crippling blow while almost out of cash

    Faraday Future FF 91 press images
    Photo: Faraday Future

    Struggling California EV startup Faraday Future was dealt a potentially crippling blow on Thursday, according to a press release from its main investor and confirmed by a person familiar with the matter. The arbitrator in Hong Kong that’s sorting out the company’s fight with its main investor ruled against a motion from Faraday Future to loosen the grip that the backer, Chinese real estate conglomerate Evergrande, has on the startup’s intellectual property and assets.

    Faraday Future was seeking this specific relief from the arbitrator because the company believed it would enhance the chances of receiving a lifeline from a new investor, according to the person familiar with the matter. But without any assets left to offer up as collateral, and with Evergrande still holding the reins, the people in control of the company were now scrambling to figure out what other moves might be available in an emergency meeting held Thursday, this person said.

    Read Article >
  • Sean O'Kane

    Nov 21, 2018

    Sean O'Kane

    Trump administration criticizes Chinese company’s attempted takeover of Faraday Future

    Photo by Phil Esposito / The Verge

    California-based electric car startup Faraday Future might have a strange new ally in its roiling fight with main investor Evergrande: the Trump administration. The Office of the United States Trade Representative (USTR) issued an update on Wednesday to its “Section 301” investigation into China’s alleged practices of intellectual property theft and technology transfer, and Faraday Future was listed among the many examples cited in the refreshed report.

    The USTR says in the report that Evergrande’s $2 billion pledge to Faraday Future is an “illustrative example” of how the Chinese government “directs and unfairly facilitates the systematic investment in, and acquisition of, US companies and assets by Chinese companies to obtain cutting-edge technologies and intellectual property.” News of the inclusion of Faraday Future was first reported by the South China Morning Post.

    Read Article >