Putting together an automotive startup is never exactly easy, but Faraday Future’s story is one of the wilder ones. The company’s promises of luxury electric vehicles has never exactly come together, burning through billions of dollars in the process. Now, Bloomberg is delving into just what’s been going on.
The inimitable Sean O’Kane just published an in-depth account of Faraday Future’s fall on Bloomberg, and the full story is just wild. There are enough twists and turns to justify a Netflix documentary, but for now, we’ll just have to content ourselves with O’Kane’s delightful reporting.
From the article:
These bitter disputes — each centered around YT’s control of the company — made it hard for Faraday to raise money. In 2019, the company made some moves that appeared to dilute the founder’s power: it set up a management group called FF Global Partners, that received a chunk of YT’s ownership. (It now owns around 30% of Faraday.) YT was also replaced as CEO by a different former BMW executive, Carsten Breitfeld.
By October, YT filed for personal bankruptcy in the US to settle billions of LeEco debt he’d guaranteed. Creditors exchanged their claims for slices of a trust that owned Faraday Future shares, allowing some repayment if the startup was acquired or went public — giving many of YT’s foes a tangible interest in his company’s success.
What kept Faraday afloat during all of this was a series of more than a dozen loans made to the company by employees or parties related to YT, according to SEC filings.
Asked about these loans, a spokesperson for FF Global said Faraday was “unable to obtain significant third-party financing” at the time, and so it instead had to rely on “numerous smaller-scale financings that YT Jia helped facilitate,” which the group said is a “typical financing approach for founder-led startups.”
And that’s just one small section of an otherwise jam-packed story that includes boardroom battles, a lack of secure ownership, and legitimate death threats. Meanwhile, we’re all still waiting to see these Faraday Future machines start hitting the road.