Faraday Future has not yet finalized its financing and notified employees to continue to be on unpaid leave

According to foreign media reports, an internal email from electric car startup Faraday Future (FF) showed that the company has informed employees on unpaid leave that they cannot return to work as planned on March 1. Faraday Future said it will extend the unpaid leave period for employees, but did not disclose the specific period. These employees have been on unpaid leave since December last year.

Photo: Faraday Future

Faraday Future has been searching for new funding since a dispute with its largest outside investor, Chinese real estate giant Evergrande, became public in October. Evergrande pledged to invest $2 billion in the California-based electric vehicle startup in late 2017, but Faraday Future burned through its initial $800 million investment by mid-2018. When Faraday Future asked Evergrande to pay about $600 million more upfront, Evergrande ultimately refused, and the two companies fell into a dispute that left Faraday Future's cash flow all but dried up.

This led to some Faraday Future employees being cut or fired, and eventually hundreds of employees were placed on unpaid leave in December. The number of Faraday Future employees was cut from about 1,000 to 600 in early November last year. As of December last year, only about 250 employees continued to work normally.

Faraday Future's struggle with Evergrande, coupled with subsequent layoffs and furloughs, also led to the departure of some key executives last fall. The last member of the original executive team, General Motors veteran and electric vehicle industry leader Peter Savagian, and company co-founder Nick Sampson both resigned within three days of each other.

“I will never again have the opportunity to learn about the negative impact our company has had on the lives of our employees, their families and loved ones, and the ripple effects it has had throughout our suppliers and the industry as a whole,” Sampson wrote in an email to employees on the day he resigned.

Faraday Future and Evergrande reached a settlement of sorts in late 2018. Although Evergrande still holds a large non-controlling stake in the electric vehicle startup, it agreed to terminate the deal and Faraday Future can continue to seek third-party financing.

The problem now is that Faraday Future hasn’t been able to secure any new investors. In an email sent late Tuesday, Faraday Future said it has “been in serious discussions with potential investors to raise both asset-based debt financing and equity financing,” but added that these “funding rounds are taking longer than the company initially anticipated.”

Founded in 2014, Faraday Future has been designing an electric luxury SUV called the FF91 for years. The car is considered faster than Tesla's electric cars and costs nearly $200,000. However, the electric car startup has repeatedly had cash flow problems in the past two years, causing the launch of the first car to be delayed. After Evergrande invested in late 2017, Faraday Future planned to put the FF91 into production by the end of 2018. But now, the company and its electric cars are still in trouble.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.