Chinese Tycoon Faraday Future spend around $3 billion and 8 years on a car that was never built. They burned through cash and board seats while the founder of the company fought for control. The project or work finally gets the word Kill.
The menacing emails marked the apex of a months-long fight for control over Faraday Future Intelligent Electric Inc., a Los Angeles, California-based publicly traded electric vehicle startup that once billed itself as the next Tesla. In September, after the death threats, persistent pressure from Faraday’s largest shareholders, and a surprising cameo from property giant China Evergrande Group, Swenson, the executive chair, and three others agreed to leave Faraday’s board of directors in a sweeping restructuring.
While it’s not known who sent the death threats the company has referred them to the FBI some leaders inside Faraday believe they were inspired by the boardroom fight recently waged by its largest shareholders, including a group that is partially managed by the startup’s founder, exiled Chinese tycoon Jia Yueting. (The group, FF Global Partners, denies any involvement in the threats.)
Faraday Future did not respond to a list of questions. Seven months ago, Faraday’s board sidelined Jia, who goes by YT, following an internal probe that examined his influence over day-to-day operations, as well as a series of loans employees made to the startup over the years.
Burning $3 billion
Now, he stands to benefit greatly from the impending board shakeup, which will be completed when Faraday holds its delayed annual meeting. He has been named an adviser to the board, and FF Global will have input on all six new members. As Faraday put it in a recent SEC filing, “YT Jia and FF Global have strengthened their already significant influence over the Company.” But as YT reclaims power, it is over a company that’s under investigation by the US Securities and Exchange Commission in relation to the findings of the internal probe information the Department of Justice has inquired about, too, according to Faraday. The startup also needs money, fast.
After burning through more than $3 billion since it launched eight years ago, Faraday reported just $27 million in cash on October 25th and says it needs millions more if it hopes to finally ship its elusive SUV. Debt Binge YT ascended in China during the early 2010s when a tsunami of cash flowed to founders with big visions. He started the “Netflix of China” and parlayed its success into a conglomerate called LeEco, which made everything from smartphones to Android-powered e-bikes. Its expansion was fueled by billions of dollars in debt, and YT personally guaranteed many of the loans.
