I read a report a month or so ago that stated that Faraday Future – one of the Tesla Rivals I wrote about several years ago, has finally got hold of a new round of financing that (in theory) should get them to full production status.
Faraday Future is a California based company yet the founder and initial investors are Chinese – this is interesting in its own right because there are many electric car companies being created in China. Perhaps, Jia Yueting – the founder – felt that he needed to be close to Silicon Valley to make his venture work. It now seems that the funding has been granted because the Committee for Foreign Investment in the US has provided the necessary approvals.
Faraday is another throwback to the (very) early years of modern technology. Like Nikola and Tesla, both named after Nikola Tesla who designed the modern alternating current, Faraday is named after a British scientist, Michael Faraday, who lived a century before Tesla and developed electromagnetic induction. Both scientists provided the basis for today’s electric motors.
Faraday has been showing concepts, prototypes and messaging for several years, however the industry was always sceptical about whether the cars would ever get into production. Like Tesla, they have had issues around payments to suppliers and lots of hype to cover the underlying lack of funding.
In recent times, Faraday has lost some senior executives who have jumped ship to their own vessel to compete against them. Interestingly, and possibly ethically wrong, those executives claim to have funding from the very sources they were working to attract to Faraday. The new funding now means that the company ownership is split three ways: 45% by Evergrande Health, a Hong Kong based entity; 33% by Jia Yueting; 22% by the employees. Evergrande who typically specialise in investing in media and health companies has put $2B into the coffers.
We might see the FF91 on city streets within the next twelve months – it was supposed to be this year, however without full factory facilities that really wasn’t realistic. However progress has been made in recent months. In July they received a Temporary Occupancy Certificate from the City of Hanford, south of Fresno in California. This certificate allows the company to complete the factory build and subsequently they completed the first body-shell at the site. They are still forecasting completed cars for sale by the end of the year.
The FF91 has three electric motors with an equivalent power output of 1,000hp! It has a range of 300 miles and Faraday is focused on fast charging – they claim 30 minutes would provide an extra 200 miles of range, so the vehicle could feasibly be driven much longer distances than many of the cars available today.
Now, with all the hype around electric supercars, Faraday have also gone down that path – it makes great headlines whilst they get the “normal” car to production. The FF Zero 1 concept is described not as a concept car rather “a car of concepts”. Don’t you love marketing!
Earlier this month, the company released a statement that they weren’t leaving California anytime soon. This was prompted by this statement from Evergrande, the new investor:
“New operating headquarters for China will be opened in the southern metropolis of Guangzhou for Evergrande FF Intelligent Automotive (China) Co. Ltd., which was officially founded in the city on Tuesday. The company will be fully responsible for Faraday Future’s research and development (R&D), production, operations and management in China.”
Evergrande plan to build five R&D and production facilities in China in order to achieve a production capacity of five million (!) cars over the next 10 years. That is ambitious and may get the attention of the Chinese Government investment watchdog if there is any hint of peer-to-peer lending which has dogged the China technology investment market for years.
I did read a report that Jia Yueting had already fallen foul of the Chinese Government for failing to pay back large debts from an earlier tech company and they ordered him to return home, which he didn’t. Perhaps that is why he is staying put in California, he might be worried about possible jail time if he touches down in Asia again.
There are many people who don’t believe that Faraday Future will make it – they are making progress and the next six to twelve months will be critical for the company. If they cannot get a vehicle to market, then they will likely be doomed, however they are not the only ones, there are plenty of Asian and European companies in the same situation. We have gone back 120 years in the industry where a lot of people will lose a lot of money and a small group will make a fortune.