The company’s chief executive Carsten Breitfeld told Reuters that the company is working on a reverse merger with a SPAC and “will be able to announce something hopefully quite soon.”
Breitfeld, formerly the co-founder of Chinese EV startup Byton, declined to give more information about who Faraday is talking to or when the deal will close. A Faraday Future spokesperson contacted by TechCrunch also said the company had no further details to share at this time.
SPACs are blank-check companies that are formed to raise money through an initial public offering in order to merge or acquire other companies. As TechCrunch’s Connie Loizos wrote in an explainer, they’ve become more popular among tech companies recently because many had their initial public offering plans delayed by the pandemic. SPACs also present an alternative to the regulatory issues surrounding traditional IPOs.
Shortly after being appointed CEO in September 2019, Breitfeld told Automotive News that Faraday Future wanted to raise about $850 million by the first quarter of 2020. By that time, the company had already received $225 million in bridge financing led by Birch Lake Associates. The funding’s purpose is to finally bring Faraday’s flagship vehicle, the FF91 luxury electric SUV, to market.
Though the SPAC deal’s timeline is still undisclosed, Breitfeld told Reuters that Faraday Future plans to start volume production of the FF91, its first electric luxury SUV, 12 months after securing funding. This would represent a major milestone for the company, which was founded in 2015 but hasn’t produced a production vehicle yet. Faraday Future has made several prototypes, including one that went up for auction in August.
If the deal is successful, Breitfeld told Reuters that Faraday Future will first build the FF91 at its Hanford, California plant, but then work with a contract manufacturer in Asia with which it has already entered into an agreement.
Faraday Future’s financial issues date back to 2017, when LeEco, the Chinese tech company with which it was closely linked, began dealing with multiple financial headaches of its own. They worsened when Faraday Future fell out with its main backer, Evergrande Health, in 2018.
Many of those issues were tied to Jia Yueting, founder and former CEO of LeEco and Faraday Future, who filed for personal bankruptcy earlier this year. Filings in the case revealed that Jia’s bankruptcy was funded by one of Faraday Future’s main holding companies, Pacific Technology. The documents also revealed that Faraday Future had just $6.8 million in cash at the end of July 2019.
Breitfeld told Reuters that Jia no longer owns stock in Faraday Future. The approval of Jia’s bankruptcy enabled Faraday Future to once again pursue investments to produce its electric vehicles, though now that may hinge on the success of its SPAC deal. Breitfeld acknowledged that Faraday Future’s past raises questions. “Because of the history and sometimes the bad news of the company, not everyone is really trusting us,” he told Reuters. “They want to see that we’ve become a stable company.”