The struggling startup of EV Faraday Future began demolition and construction at its factory in Hanford, California, and is preparing to begin the production of its luxury electric SUV, according to a new video released today.
It is one of the clearest (and only) public signs that the company has given in recent months about where it is, as it continues to move towards its goal of shooting the first production versions of its car, the FF91, outside of the line towards the end of this year.
The newly-created automaker narrowly escaped financial death by the end of 2017, receiving an investment of the eleventh hour from an unnamed group in Hong Kong. With an amount of around $ 550 million of what could be about $ 1.5 billion, the company has been paying off some of its debts, and is now pushing plans to do the FF91 at the Hanford facility.
The company has purchased all the long delivery time equipment it needs to enter production, and will start installing what is needed to manufacture the preproduction versions of the FF91 on May 9, according to a person from the company. If everything goes well, Faraday Future expects to launch the first preproduction car by the end of August, with the aim of taking out a production car by the end of the year.
This is no longer taking place in Las Vegas, as originally planned. Faraday Future abandoned its efforts to build a $ 1 billion manufacturing plant last summer in the midst of its severe financial crisis, and is instead renting a former Pirelli tire factory in Hanford. Until the demolition, the "new" installation had remained intact since Faraday Future signed the contract last August.
It is quite surprising, considering the position that Faraday Future had at the end of last year. As of summer, a number of executives, including some who had been present since the company's early days, resigned. Then, in November, the former BMW and Deutsche Bank executive who had been hired to help straighten the company's finances also left after repeatedly clashing with Jia Yueting, founder and current CEO of Faraday Future.
The executive, Stefan Krause, had taken important steps as chief financial officer to reduce the company's expenses. He eliminated the motorsport program of Faraday Future, stopped a product placement agreement with the Transformers movie franchise, and pulled LeEco out of its agreement to develop an EV with Aston Martin, several former employees told The Verge at the time. (LeEco was also founded by Jia. Faraday Future and LeEco have long maintained that the companies are separate, but an investigation by The Verge revealed that Faraday Future runs more like a subsidiary of the Chinese technology conglomerate).
Krause was also behind the installation of the company's headquarters in Los Angeles as a guarantee to secure a $ 14 million "rescue loan" last year. In the midst of all these movements, he was also preparing the company for Chapter 11 bankruptcy, an idea that infuriated Jia according to multiple former employees at the time. The result was that, after Krause left the company, Jia issued a statement claiming that he (and CTO Ulrich Kranz, who worked closely with Krause and also resigned) had been fired for "embezzlement and dereliction of duty" while They were at work.
The company canceled its "rescue loan" of $ 14 million, among other debts
As the dust was settling in December, Jia held a meeting with all the company's members, where he announced that he would take over as executive director, playing a role that had apparently been empty since the company's founding. He also announced that the company received an investment of around $ 1 billion.
That figure later turned out to be closer to $ 1.5 billion, according to Business Insider, although Faraday has received less than half to the extent that the total amount is linked to certain production milestones. Even so, it is enough for the company to refocus on producing a luxury EV.
The money has also helped the company do some repairs. Faraday Future has paid the $ 14 million rescue loan, according to documents obtained by The Verge. The company also paid part of the debt with some of its suppliers, according to sources familiar with the matter, and the company recently held a "suppliers summit" where it met with many of these companies face to face. Faraday Future also continues to promote and give increases to employees who are thinking of leaving, according to several people who are still inside the company.
Faraday Future also renewed its interest in selling its cars in China, and Jia said at the supplier summit that the company wants to follow a "dual home market" strategy. The split personality of the company between its Western ambitions and those of China has caused tension for a long time within the company, with signs of a break that dates back to January. But with Jia now firmly under control, the company no longer seems to be so focused on the US market.
Jia still has problems with creditors and the government of China, so it is not clear how he would address what is now the largest EV market in the world. He could have been referring to LeEco's EV effort, LeSee. Faraday Future shares intellectual property and employees with LeSee, and The Verge learned at the end of last year that the Chinese car would eventually be produced at the Faraday factory. Either way, Jia's nephew, who is now also the company's majority shareholder, has been back in China and Hong Kong working on deals, according to two sources with direct knowledge of the situation.
Faraday Future promised that its factory would bring more than 1,000 jobs to Hanford, California
Whatever happens in China, Faraday Future finally seems ready to continue producing its expensive, but ridiculously fast EV in California. Meanwhile, the city of Hanford has been waiting. The Pirelli plant had been largely inactive for more than 15 years, and Faraday Future pledged 1,000 jobs north once the factory is operational. "I do not think anyone imagined it would be simple, you know, unicorns and rainbows," city manager Darrel Pyle told The Verge last year. "We see our role as a supporting role to bring the company to fruition."
But as Faraday Future tries to get back to normal, he is still dealing with many problems from his past. A lawsuit is being filed with Krause's new company, and another with accusations of sexual harassment is scheduled for trial in December. And some providers have not yet been paid. A subcontractor who spoke with The Verge was part of a contract worth millions of dollars that dates from the end of 2016. But this person says that not a single invoice was paid. "The part that bothers me is that Faraday continues to hire people and hire salespeople, knowing very well that they have not paid the previous sellers," said this person. "If they go up, and they probably do, then we do not get anything."