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Photo of Jia Yueting: VCG / Getty Images
Photo of Jia Yueting: VCG / Getty Images

Burn Out

Inside Faraday Future’s financial house of cards

Illustrations by James Bareham

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When Faraday Future emerged from stealth mode in 2015, it promised to transform the car industry with an American-made luxury electric vehicle that would someday be fully autonomous, maybe even sold through a subscription service. As we learned at CES 2017, the company was taking aim at Tesla with a car — the FF91 — that was designed to dazzle, with a 0–60 time of 2.4 seconds as jaw-dropping as the proposed $180,000 price tag.

Since then, though, Faraday Future has been more focused on survival than speed. The Verge has learned from multiple sources about the nature of the company’s financial plight. While Faraday Future posed as the newest California electric car startup that attracted top auto industry talent, 10 former employees and one person close to the company say the behavior and business practices of its chief investor have brought business to a halt. The former employees, most of whom left Faraday Future at different points within the last 15 months, requested anonymity due to nondisclosure agreements with the company. The other requested anonymity out of fear of litigation.

Their accounts support and build on previous reports, and paint a more comprehensive picture of unusual financial management by the two people most directly in charge of the company’s finances: Jia Yueting, the main investor and shareholder, and Chaoying Deng, who has held many different titles at the company, but lists herself as the company’s vice president of administration on LinkedIn.

Where the company stands financially is unclear. Four high-level former employees with knowledge of the company’s finances told The Verge as recently as early December that, barring a new cash infusion, Faraday Future only has enough funds to keep its payroll afloat through the end of the year. But Yueting, who is known as YT, is still meeting with potential investors to keep the company alive, and may have secured a new round of funding, according to one of these people.

Either way, according to multiple sources, many remaining employees are planning their exits, or have left. Others are simply no longer showing up for work; when YT arrived at the company’s Gardena, California, headquarters on the morning of Monday, November 20th to meet a group of potential investors, he found so few employees on site that an email, which was obtained by The Verge, was sent to staff by Faraday Future’s head of go-to market strategy that reinforced the company’s work hours.

The majority of these sources say YT inflated financial promises to the company, and they believe his ambitions overmatched the company’s waning cash flow. Their accounts suggest he insisted on keeping money, intellectual property, and employees fluid between Faraday Future and the electric car effort of LeEco, a tech conglomerate he founded in China. And many sources say that he left Deng, who had little experience running the accounting of a company this large, in charge of the money.

Reached for comment on the issues brought up in this report, a spokesperson for the company issued a singular response: “As a private company, Faraday Future will not discuss its finances, nor will we discuss the finances of our investors.”


Representatives for Faraday Future admit that YT is the main financial backer of the company, but have maintained that the company was independent from his Chinese conglomerate LeEco, which is currently mired in controversy. YT himself once said on Twitter that he is “just an investor and strategic partner of FF.”

His involvement runs deeper than that of a typical investor, according to these former employees. And his influence started at the company’s inception, when he came together with Lotus and Tesla executives Tony Nie and Nick Sampson in 2014 to help start Faraday Future, these people say. The company was incorporated in the spring as “LeTV ENV Inc.,” according to documents filed with the California secretary of state, and later that summer, the name was changed to Faraday&Future Inc.

That same year, Los Angeles County property records show, a company called Ocean View Drive, Inc. bought a six-bedroom, eight-bath mansion in the tony Los Angeles County neighborhood of Rancho Palos Verdes for $7 million. One year later, the company bought two additional homes on the same street for just over $7 million each. In documents filed with the California secretary of state in 2016, YT was listed as the CEO of Ocean View Drive, Inc. (News of Ocean View Drive, Inc. and the first mansion were first reported by Jalopnik in November.)

Around early 2015, Faraday Future’s founding executives presented YT with a plan for the company that focused on one model made in one small factory, according to former employees with direct knowledge of the company’s finances. The original goal, these people recall, was to someday make about 50,000 of these cars a year.

YT inflated early production goals, sources say

But these people say that YT wasn’t pleased with that plan. He pushed for a much bigger factory in Nevada, like Tesla — a company that Faraday Future’s executives viewed as a competitor, and one that it had poached talent from — and increased the production target to multiple models and 150,000 units per year. The finance team spent weeks recalculating for this change in scope, these people say, and eventually determined the necessary investment cost would be about $3 billion.

"Once he saw that plan, he was like, ‘Well if four models and 150,000 is good, then we ought to be able to go to 5 million cars. What’s it going to take to go to 5 million cars?’” recalls one of these former employees. “That’s the kind of guy that he was, it was like, ‘Okay, but lets even think bigger. I need to be at 5 million cars by the end of 2025. In 10 years.’”

YT’s involvement in the decision-making process, plus his penchant for requesting changes to the flagship car’s design dragged development, according to some sources. Other former employees recall a day-long meeting dedicated to naming each of these new models.

Ding Lei, an executive who also worked for LeEco on its LeSee brand of electric cars, took the finance team’s information to China to present to YT, according to multiple former employees who were working at the company at the time. The physical distance between the company’s executives in California and LeEco executives in China increased frustrations throughout the company that YT was trying to “shadow manage” Faraday Future, former employees say. And there was confusion among employees about LeSee, which appeared to outsiders to be a competitor to Faraday Future’s car.

Patents filed with the US Patent and Trademark Office show that Faraday Future’s intellectual property was shared with LeSee. The ultimate goal, according to multiple employees familiar with Faraday Future’s manufacturing plans, was to produce the LeSee car using the same production lines Faraday would use to make its own car, the FF91. The company missed a planned 2016 CES reveal partly because of YT’s constant changes, these people say.

Despite delays the number of employees continued to grow — from around 500 to 600 people at the end of 2015 to nearly 1,500 in the summer of 2016. “Which was ludicrous, they didn’t have work for 1,500 people,” says one of the former employees with knowledge of the company’s finances. “The people who came from Tesla, who you would have thought would’ve had a startup mentality having gone through the difficult times [there]. They were just like, ‘You know, I've got an organization of 200 people approved, so I’m going to go out and hire them, even though I don’t have anything for them to do,’” this former employee says.

The company never stopped growing, even at the first signs of trouble

The scope of the business was ambitious as they pursued plans for a $1 billion factory in the Nevada desert, much like Tesla did with its Gigafactory. Other sites were considered but dismissed by YT and the company’s leadership (including the founding executives and YT’s team from China), multiple sources say. Factories in Illinois, Georgia, and Louisiana were all visited, according to emails and documents obtained by The Verge.

“Mitsubishi was sitting on its [old] plant,” a second person with direct knowledge of the company’s finances says, referring to the Normal, Illinois, factory that the Japanese car manufacturer closed in 2015. “And the cost of the plant was one dollar. Retooling would have only cost between $100 and $200 million.”

The local governments in Shreveport, Louisiana, offered combined incentives worth hundreds of millions of dollars, as was recently reported by Jalopnik. But YT’s ambitious guidance had emboldened the leadership, sources say.

“They wanted to build a new plant with a glass facade in the middle of the desert because it would become a tourist attraction,” this person says, which other sources support. That way, “it’s near Vegas, people would drink too much and then they’d stroll in, I guess. Because that’s exciting?”

Faraday Future’s unchecked growth became a problem when payments to the company from YT and other Chinese investors dried up over the course of 2016. YT was dealing with mounting problems at LeEco in China, and while he was still shaping the scope of Faraday’s biggest ambitions, the day-to-day finances were managed by someone else, according to nearly everyone spoken to for this story: Chaoying Deng.

Deng’s name turns up just about everywhere you look when it comes to Faraday Future and LeEco. She’s labeled secretary of Faraday Future in a 2014 California state document where the company’s official name was amended to Faraday&Future Inc. She’s the company’s CEO in later documents filed in 2015 and 2017. Others name her as the president. On one of her two LinkedIn accounts, she lists herself as the “vice president of administration” of Faraday Future.

Her name also appears on property documents related to the now-abandoned office that LeEco used for its US headquarters in San Jose, California, and as a signatory on a $140 million mortgage debt on the 50-acre Santa Clara property LeEco bought from Yahoo.

Sources say Deng, who comes from the movie industry, is in control of the company’s cash

But Deng has no background in the automotive industry, according to her LinkedIn profiles and the accounts of former employees who have worked with her. She’s a former movie producer, who was once an executive producer for The Flowers of War starring Christian Bale. She became the director of LeEco’s US movie arm in 2014, and YT then installed her at Faraday Future, where she was put in charge of the company’s accounting, these people say.

While Faraday Future’s representatives have always said that the company has a “strategic partnership” with LeEco, they have maintained that the California carmaker was independent from YT’s other businesses.

But what former employees describe is that, financially, Faraday Future was run more like an affiliate of LeEco, with people like Deng wielding power at more than one of these companies. According to one former employee, YT and Deng justified this closeness by saying these companies were “a family.” (This person says this was also the explanation given when employees asked why Faraday Future was also responsible for making the LeSee electric car.)

Deng had more control over that money than the company’s finance directors, multiple former employees say. “She wouldn’t allow [them] access to it,” one former employee close to the company’s finances says. “Chaoying is the gatekeeper,’” another says. (Deng did not respond to multiple requests to be interviewed for this piece, both through direct attempts to reach her and through the company’s communications department.)

The mechanics of exactly how Deng moved money in and out of Faraday Future wasn’t completely clear to former employees who spoke to The Verge. That includes those who would typically have an understanding of their company’s cash flow. But it essentially worked like this: Deng would bring requests for money to YT and a small cohort of top executives across the companies he ran in China, including YT’s nephew Jiawei Wang; that money would then be deposited into a bank account only Deng had access to, before making its way to Faraday Future, former employees say. The money was then used to pay the company payroll and occasionally pay suppliers, but some of it would go to other LeEco subsidiaries, these people say.

Exactly where the cash came from was also typically unclear, according to these former employees. They believe the cash came from investments made or raised by YT; from the Chinese LeEco subsidiaries, either directly or by way of the LeEco’s US arm; or from one of myriad holding companies in China, Hong Kong, and the Cayman Islands. The entity structure was a “confusing mess,” another former employee with knowledge of Faraday Future’s finances says.  

Faraday Future was treated like an affiliate of Leeco, and the entity structure was a “confusing mess,” former employees say

A constant cash flow was always promised by both YT and Deng, according to a number of former employees. “It was always, ‘Don’t worry, the money’s coming next month, the money’s coming next month, keep going, keep going, keep going,” according to one. But not only did YT’s investments stall in mid 2016, the early 2017 promise of a $1 billion convertible note from China was never delivered on, these people say. Instead, the company has only recently been connected to a note of around $400 million, which is in danger of becoming payable debt if Faraday Future doesn’t raise Series A funding by the end of 2017, as reported by Bloomberg.

In 2017 especially, according to multiple former employees with knowledge of the company's finances, the money that came into the company was often spent immediately, and there was generally “no money in the bank.” The only stable deposits in 2017 were used for company payroll, which cost Faraday Future about $12 million a month, these former employees say. But even those payments, they say, sometimes wouldn’t be deposited until days before they were due.

“The books and records were in bad shape,” one former employee with knowledge of the company’s finances says. This person described the company as lacking some of the typical processes put in place, like requiring authorizations for things like cash disbursements, or purchase orders. Another former employee with similar knowledge of the company’s finances agreed with the assessment. “[This was] highly unusual from an internal controls standpoint,” the second former employee says. “No one person should be able to do everything with an account.”

These accounts were supported by others spoken to for this story, many of whom say it contributed to the company’s current financial woes. Multiple former employees say the haphazard approach to structuring the company’s finances is why the accounting firm KPMG cut ties with Faraday Future, as reported by Jalopnik earlier this year.

It’s also what drove some of the Faraday Future’s finance directors to leave the company, according to former employees.

One such former director was Syed Rahman, who resigned in June 2016 after spending a year as a controller in the company’s financial planning and analysis department. "During my time at Faraday, the company lacked an empowered CEO and COO,” Rahman tells The Verge in an email. “This, combined with a lack of understanding of Western business practices, fact based decision making, and compliance issues exacerbated the problems. The automotive business is highly capital intensive with low margins and without a lack of effective leadership, success in this arena is not possible."

Efforts that were made to shore up the financial situation were dismissed, former employees say. For example, when Faraday Future signed a deal to pay $500 million to engineering firm AECOM for its Nevada factory, the leadership didn’t shop for a second bid, according to documents and emails seen by The Verge. When one of the company’s finance directors at the time protested the move, which former employees describe as uncharacteristic for a deal this large, he was asked to leave the meeting, according one person who was present.

In 2016, the company was presented with an opportunity to raise investments totaling around $1 billion. But YT, Deng, and Wang refused to provide the finance team with term sheets that spelled out what stakes potential investors would get in return, according a former employee with knowledge of the situation.

“You know, I’ve been in the automotive business all my life, and I just find it hard to compare it to a ramen business.”

Finding it odd that this information was being withheld, this person says, “At that point it became quite clear to me there was something not Kosher [going on].”

“There’s no point of them not being able to share [information about] how much of the company can we give away in a funding round unless you’ve got something to hide,” this person says.

At another point in 2016, plans were presented to Deng to replace the company’s expensive catered lunches with a company-run kitchen in order to save money, according to a former employee with knowledge of the situation. Deng turned down the idea, citing past experience with a ramen business in Hawaii. She cited this experience other times when justifying spending decisions, too, according to another former employee.

“You know, I’ve been in the automotive business all my life, and I just find it hard to compare it to a ramen business,” this person says. “I guess there is manufacturing involved. You put some base, and soup, and you put some noodles in there and then maybe you put some meat. And then it’s completely manufactured. It goes down a line. But it’s slightly different from building a car.”

One other place Deng’s name shows up is with Ocean View Drive, Inc., the company that was used to buy the three mansions in Rancho Palos Verdes. Deng is listed on the company’s incorporation document, which was filed three days before the purchase of the first mansion, as both chief financial officer and secretary.

YT stayed at these cliffside estates from time to time over the past year when he visited the business, but he has taken up permanent residence there after leaving China this summer, according to multiple sources with knowledge of the situation.

Several people describe them as pseudo-hotels for important visitors, event spaces for the company’s employees, and places to host lavish dinners meant to impress potential investors.

"You want to drive a Lamborghini? Here you go. You want to drive a Ferrari? Here you go. Whatever you want.”

“[These people would] come into Faraday Future, look at the plant, then they would get carte blanche,” says one person with direct knowledge of the situation. "You want to drive a Lamborghini? Here you go. You want to drive a Ferrari? Here you go. Whatever you want. You want an estate? Here you go.”

The privilege of staying in these multimillion-dollar mansions was extended to some of the most senior executives at Faraday Future, according to multiple former employees. “Like, let’s say they live in Ohio, but they’re an automotive executive, and they’re not going to move their whole family [to work for FF],” says one of them, who worked on the car projects of both LeEco and Faraday Future. “They would live there during the week. Instead of paying for expensive 5-star hotels, [the company would] put them in a 5-star mansion instead.”

Deng also lives at one of these mansions, according to multiple former employees, and in June, she was served lawsuit papers at one of them at 7:15AM. She took up residence at the mansions because, aside from her duties at Faraday Future, it’s up to her to manage these properties, multiple former employees say. That includes making sure YT is “well treated” by keeping his residence stocked with expensive wine, whiskey, steak, and other amenities, one says, an account that echoes details shared by other sources with knowledge of the situation.

But some sources say the houses are for more than shelter. According to two former employees with knowledge of Faraday Future’s finances, YT and Deng tried to use these houses as collateral to raise money for the company in 2016. Since they weren’t owned by Faraday Future, the company’s finance team stopped the effort.


In the last year, YT has dropped from 31st to 1,978th on the Hurun Report, a list of China’s wealthiest citizens. Financial troubles and turmoil have racked LeEco, which has vendors and creditors literally camping out in its lobby waiting to be paid. In turn, YT’s been staying in the United States since resigning from the top post of LeEco’s holding company this summer, according to multiple former employees and a source close to YT.

But YT faces struggles in the United States, too — and so does the car company he now controls.

New lawsuits, three of which were previously reported by Jalopnik, are piling on top of ones that had already been filed against Faraday Future.

One lawsuit filed against YT includes Deng and Ocean View Drive, Inc. as defendants. The plaintiff, Miles Bernal, claims to have been employed to help run operations at the mansions, and argues that he was wrongfully terminated from the company. The lawsuit argues that YT and Deng “used Ocean View Drive, Inc. to engage in illegal and improper activities,” including the co-mingling of funds and the personal use of company assets and money.

Both YT and the company are embroiled in lawsuits

Faraday Future is being sued by Oloroso, LLC, a company that catered the event at CES where the company unveiled the FF91. Oloroso claims that Faraday refused to pay a remaining balance of $100,000 that it owes for the food and services provided at the event in January. Faraday Future is also being sued by a law firm that it hired to help it place the FF91 in Transformers 5. And the car company is named as a defendant in a lawsuit that accuses one of its employees of sexual harassment and cyberstalking.

In another lawsuit, Beim Maple Properties is suing for breach of contract, and asking for damages of more than $15 million, claiming owed and future rent. Beim evicted Faraday Future from a small office space in Torrance, California, that was being used as a design studio at the start of 2017, according to the suit. (BuzzFeed had previously reported in 2016 that Faraday Future was behind on rent payments to Beim.) The signatories on the lease agreement for the property are Deng and Wang, YT’s nephew, according to documents included in the lawsuit. Two former employees with knowledge of the situation tell The Verge that Deng went ahead with leasing this particular property despite warnings from the finance team that there wasn’t enough money to do so at the time.

In October, YT filed a libel lawsuit against Gu Yingqiong, a software developer in Washington who runs a WeChat account called “Dr. Yingqiong Gu Talks About The World.” Gu has made many accusations on his blog, certified translations of which The Verge has read because they were included the lawsuit. They range from criticisms about the feng shui of YT’s mansions to far more serious claims, including that YT was using Ocean View Drive, Inc. to launder money through the properties in Rancho Palos Verdes. He compares YT to Bernie Madoff, calling Faraday Future and the money surrounding it a “Ponzi scheme.” He also claims in another post that YT is applying for a green card through the EB1C program to avoid returning to China.

The posts were also publicly denounced by YT. One of Gu’s posts in particular apparently sparked YT’s legal action. On September 14th, Gu posted what he claims to be a draft copy of a $75 million trust fund that YT set up for his children, and alleged that the money was taken from Faraday Future’s coffers. A day later, the website Sina.com interviewed Gu about the post, according to a copy of the interview included in the lawsuit. “If they think this document is false, they can sue me in court,” Gu said. YT’s filed suit less than one month later, and in the initial complaint, his lawyers call Gu's behavior "a continuous and systematic effort by an individual to intimidate, harass, and defame a stranger over the internet."

Meanwhile, Faraday Future has dipped back below 1,000 employees in California, according to statements made by YT in the lawsuit filed against Gu Yingqiong. LinkedIn is flush with newly departed “Faradians,” as they’re called at the company.

Krause made demands before and after resigning, including Deng’s removal, according to former employees

The rate of departures is growing following the recent public spat between YT and Stefan Krause, according to multiple sources with knowledge of the situation. Krause, a former executive at Deutsche Bank and BMW, was brought to Faraday Future in March to put the company on the right financial track. By and large, he stuck to that commitment, these people say. Krause killed off what he saw as frivolous expenditures, like the company’s involvement in motorsports, the product placement deal with the Transformers movie franchise, and he even decided to sever LeEco’s partnership with Aston Martin, according to these sources.

Krause tried to detangle company’s finances and make them more transparent, former employees who recently left the company say. But YT’s reluctance to relinquish control as majority stakeholder and decision-maker, and his refusal to explore Chapter 11 bankruptcy, stood in the way, according to these people. Krause resigned on October 14th along with CTO Ulrich Kranz, multiple sources say, having made demands that YT wouldn’t meet — including that YT remove Deng from the company. These discussions continued even after Krause resigned, according to these former employees, but came to an end when news broke of the CFO’s departure in November. The company maintains that Krause was fired.

Before Krause left, some employees who remained at Faraday Future were dutifully taking steps to continue with its plan to produce the FF91 in Hanford, California — another factory site the company had considered in 2015 before deciding to pursue Nevada.

In September, SVP of global manufacturing (and founding executive) Dag Reckhorn spoke at the town’s rotary club meeting, and in October he presented at a local economic development event. Obrie Hostetter, who manages the company’s charging solutions team, recently attended a California Air Resources Board meeting in support of using funds from the Volkswagen Dieselgate settlement to bring charging infrastructure to the area, according to emails obtained by The Verge in a public records request.

Removed from the chaos swirling inside the company, city officials expressed enthusiasm in the weeks that followed the announcement that a potentially major player in the electric car market was coming to town. Phones were “ringing off the hook,” according to one email, and inboxes were full of congratulations.

“The two of us are the electric vehicle manufacturing center of the universe.”

In an August email, Hanford city manager Darrel Pyle asked a fellow city manager about grants received by GreenPower, an electric bus company in a nearby town. “Since the two of us are the electric vehicle manufacturing center of the universe,” he wrote, “I’d like to follow up to see if Faraday Future would qualify!”

In another thread, Kings County Economic Development Office president John Lehn thanked Pyle for the city’s help in splitting a $1,200 bill for ice cream that was provided at the factory cleanup day Faraday Future held at the new facility.

“Sooo worth every penny,” Pyle replied.

By November, that optimistic tone had vanished. “This is scary,” a manager for the Kings County EDC said in a November 13th email to Lehn, Pyle, and others, while sharing a link to the news of Krause’s departure.

One hour before that, Pyle sent an email to Faraday Future’s Detrick Sanford and Kevin Vincent, the government relations and regulatory affairs leads for the Hanford factory project. The subject was “I’m getting calls.”

“Gents! Some local reporters are calling asking if Faraday is still coming. Is there any news we can share if asked, or is there anything you can share with us, and we won’t share?” he wrote. “Just curious.”

Sanford and Vincent had already left the company when he clicked send.

Edited by Tamara Warren

Additional reporting by Zac Estrada