Electric Vehicle (EV) startup Faraday Future has punted the launch of its flagship EV, the FF91 citing a cash crunch. The California-based startup, struggling to get the FF91 into production, said in a July 25 Securities and Exchange Commission (SEC) filing that it requires additional capital to pull off the launch.
Faraday Future Intelligent Electric Inc. ($FFIE), founded in 2014 in Carson, California, had committed to start commercial production and sales of its FF91 SUV crossover as early as 2018. Still, it has postponed its plans many times since then.
Even as the Los Angeles-based EV startup went public in July 2021 merger with blank company Property Solutions Acquisition Corp., it revealed that it plans to launch the EV by the first week of July 2022.
However, now the company’s SEC filing states, “The company needs additional cash to launch the FF 91 commercially and is currently seeking to raise additional capital to fund its operations through December 31, 2022.” The company said in an investor slide deck that it was looking to raise about $325 million.
“Due to recent supply chain issues, the start of production and first deliveries of the Company’s FF 91 flagship electric vehicle in the United States is now expected to commence in the third or fourth quarter of 2022,” said SEC 8-K form filed by Faraday Future.
Trouble has continued to hound Faraday Future
Trouble brewed at the company in 2015, even before it unveiled a single vehicle. The startup announced to set up a $1 billion manufacturing facility in Northern Las Vegas the same year, but by 2016 it was forced to nix its plans due to financial constraints and settle for a refurbished tire manufacturing plant in Hanford, California.
Soon after, as things were looking good, the company announced the production of its flagship EV, FF91. However, by the end of 2017, the Chief Financial Officer and the Chief Technical officer of the company left to form their own company named Canoo.
In 2019 its CEO YT Jia stepped down after filing for bankruptcy but remained as chief product officer as financial ups and downs have continued to ravage Faraday Future. Former Byton CEO Carsten Breitfeld has taken over as chief since then and has somewhat righted the EV ship, but not without plenty of new obstacles. In 2021, news leaked that Faraday Future was in talks with Geely to have the FF 91s built in China to cut costs.
Cut to the present time, a media report in Bloomberg notes that the delay of the FF 91 comes amid a standoff between the EV startup and its founder, Jia Yueting. In late June, a shareholder group affiliated with him demanded the removal of a director from the company board.
Faraday accused the group of offering the director a contract worth up to $700,000 for him to resign. On July 15, the group of shareholders said in a filing that they had offered Faraday Future a lifeline of “at least $100 million” on the condition that the director resigns.
Faraday Future ignored the offer, with the group accusing the startup several days later of not treating the request “with the gravity, urgency and fairness it deserves in light of” its financial condition.