Faraday Future may finally receive the funds needed to get its FF91 battery-electric SUV into production thanks to the current wave of electric-vehicle startups going public via reverse mergers.
A reverse merger is where a private company is able to go public by being taken over by a company that's already publicly listed, typically a special purpose acquisition company (SPAC) that is set up solely for this purpose.
Faraday Future announced Thursday that it plans to go public by merging with a SPAC company by the name of Property Solutions Acquisition Corp. Should the deal go ahead, Faraday Future will list on the Nasdaq under the ticker symbol “FFIE.” Faraday Future also expects to receive $1 billion out of the deal.
Faraday Future plant in Hanford, California
In its statement, Faraday Future said the funds would mean the FF91 could be put into production within 12 months of the deal closing, currently expected to happen in the second quarter of the year. Part of the funds would also be used to develop self-driving technology.
Faraday Future said it has more than 14,000 reservations for the FF91. The vehicle will be built at a plant in Hanford, California, but Faraday Future may also tap a contract manufacturer located in South Korea. The company also said it is investigating the possibility of production in China. A Chinese company and a Chinese city are key backers of the new deal.
In addition to the FF91, Faraday Future said it is also developing more affordable models to be called the FF81 and FF71. They are targeted for release in 2023 and 2024, respectively. A teaser of the FF81 was shown in 2018. The company is also looking to launch a delivery vehicle around 2023.
Faraday Future FF91 body-in-white
Faraday Future looked promising in 2017 when it unveiled the FF91 crossover SUV but hit a snag shortly after when main Chinese backer, Jia Yueting, ran into financial troubles of his own. The company had to cut costs and stop construction of a plant in Nevada, and Jia was eventually replaced as CEO by Carsten Breitfeld, the former CEO of rival EV startup Byton.
“This is an important milestone in our company’s transformation, one that we achieved with strong commitment from our employees, suppliers, and partners in the U.S. and China, as well as the city of Hanford, California,” Breitfeld said in a statement.
A string of EV startups have all gone public in the past year in this fashion. The list includes Canoo, Nikola, Lordstown Motors, and Fisker. Another EV startup, Mullen Technologies, also plans to go public via a reverse merger, and Lucid is reportedly in talks with an investment banker with two SPACs seeking a partner.