It sounded like Faraday Future had moved beyond the worst of its nightmare-esque financial problems when it received a $2 billion lifeline from a Hong Kong-based investor in June 2018. The sizable sum, which was to be paid in several installments, promised to keep the company afloat while allowing it to launch production of the FF91, its long-overdue first model. Court documents indicate the relationship between the two firms has turned sour and Faraday wants a divorce.
Jia Yueting, Faraday’s billionaire founder, filed for arbitration in Hong Kong on October 3, according to industry trade journal Automotive News. Posting on its official Twitter account, Faraday Future bitterly claims Evergrande Health Industry Group — the new owner of the company which made the initial investment — provided an initial payment of $800 million but didn’t keep its promise of sending additional installments as the firm met performance-related goals.
“Evergrande held the payments back to try to gain control and ownership over Faraday Future China and all of Faraday Future’s intellectual property,” the statement reads. It concludes Evergrande hasn’t held up its end of the bargain while preventing Faraday Future from securing the funding it needs to remain operational from other sources. Yueting is asking the court to end the partnership between the two companies.
Faraday has spent the $800 million and it is once again in dire financial straits, according to The Verge. It’s considering laying off part of its staff to save money and it stopped paying some of its suppliers.
Evergrande initially told Reuters that it agreed to send Faraday Future the remaining $1.2 million balance in two installments scheduled to be made in 2019 and 2020, respectively. It later added Yueting used “manipulating techniques” to secure $700 million of the total sum ahead of schedule if Faraday meets unspecified goals. It strongly denies the allegations of wrongdoing and stresses it will fight to keep the 45 percent share it holds in the China-funded, California-based automaker. It also accuses Yueting of trying to strip it of the right to have a say in how Faraday Future runs its business.
It’s unclear who the court will side with, and the legal battle could last for months. In the meantime, the quagmire represents the latest in an astonishingly long stream of hurdles placed ahead of Faraday Future as it tries to bring the FF91, an electric sedan with a six-digit price tag, to production. The company’s statement stresses it remains on track to deliver the first examples in 2019. Pre-production finally started in California in July 2018 but insiders told The Verge the first prototype caught fire the following September.