Faraday Future hopes to solve its troubles through a SPAC merger at a time the EV sector is doing remarkably well.
“We are working on such a deal ... and will be able to announce something hopefully quite soon,” Faraday’s CEO Carsten Breitfeld told Reuters earlier this week.
The California-based startup, launched five years ago by Chinese entrepreneur Yueting Jia, has yet to roll off its first vehicle. After a history of debt and factory closures, Faraday plans to attract fresh capital – and some much-needed luck – via a public listing.
Breitfeld, with Faraday since 2019, told Reuters that the company has seen some mistrust from investors due to its past troubles. He said, “They want to see that we’ve become a stable company.”
He also said Jia, who recently underwent personal bankruptcy, is no longer a stakeholder in Faraday.
Faraday aims to release its FF 91, a luxury-class electric SUV, nine months after securing funding and kick off volume production three months later. For that, the company needs $800 million to $850 million, according to Reuters.
In late April 2019, Faraday announced that it raised $225 million in bridge financing from Birch Lake Associates, a U.S. asset management firm. At the time, it said it hopes to bring its FF 81 – a smaller SUV than the FF 91 – to mass-market in 2021.
Breitfeld made no mention of Faraday’s second model, but told Reuters that the FF 91 will be built in Hanford, California, and mass-produced in Asia.
This year, going public via a special-purchase acquisition company (SPAC) has been a major trend for firms seeking a way to list bypassing the tedious IPO procedure. In fact, 2020 has been a record year for SPACs as Covid-19 has delayed tradtitional IPO plans for many a company.
CapitalWatch’s chief editor, Greg Bergman, explored the SPAC evolution in a late August piece, saying the model has shed its negative association this year thanks to some big SPAC deals like that of Virgin Galactic (NYSE: SPCE).
Faraday has not disclosed with whom it is in talks regarding the SPAC merger.