Electric car startup Faraday Future could be on the ropes.
In November, Jia Yueting, the CEO and founder of tech giant LeEco, Faraday Future’s Chinese backer, announced that his company was experiencing a cash crunch, due mainly to the major drain of Faraday Future as well as another electric car startup based in China. It was around this time we also learned that work on Faraday Future’s Nevada plant had come to a halt.
Faraday Future did manage to reveal its first car, the FF 91, the following January at the 2017 Consumer Electronics Show. Since then, however, we haven’t had any news from the startup.
It seems the radio silence may be due to Faraday Future’s need for more funds. Bloomberg, citing a person familiar with the matter, on Thursday reported that Faraday Future is planning to raise $1 billion to insulate itself from the financial woes of LeEco and is currently in talks with advisers and potential investors. LeEco this week announced it was firing 325 people from its American operations as part of a cost-cutting measure.
According to Bloomberg’s source, Yueting had invested $300 million of his own money in Faraday Future but won’t be investing any more funds. Some of the investors being targeted are large scale investors such as sovereign wealth funds, the source said.
Let’s just hope any potential investors are aware of the $1.4 billion that another electric car startup, Fisker Automotive, burned through before going belly up in 2013.