Furloughed Faraday Future Workers Still on Hold Despite New Investments: Report
The electric car startup is still reportedly short on cash.
Electric car startup Faraday Future placed many employees on unpaid leave or "furlough" in December after a fight with a major investor. It had planned to bring those employees back to work March 1, but now that deadline has been pushed back, according to The Verge.
Citing an internal Faraday email, the website reported that the employees will stay on furlough for an unspecified amount of time. According to the email, the reason for the delay is that Faraday is still short of funding.
Faraday has been searching for new funding since October when it got into a spat with its largest investor, Chinese real estate conglomerate Evergrande. In late 2017, Evergrande agreed to invest $2 billion in Faraday in exchange for a significant stake in the startup. At the time, the investment was seen as a vital lifeline for the cash-strapped automaker, but things quickly unraveled.
After spending the first $800 million installment, Faraday asked Evergrande for an advance on additional funds. Evergrande refused, leading Faraday to attempt to sever ties with the firm and seek other investors. That left Faraday without a ready source of funding, forcing it to cut salaries and place hundreds of employees on unpaid leave. The situation also drove away several key executives, including co-founder Nick Sampson.
Faraday eventually agreed to new terms with Evergrande in late 2018. The startup has continued to seek new investors but hasn't found any yet, according to the email cited by The Verge. The "funding efforts have taken longer than the company initially anticipated," the email said.
It's been quite a fall from grace for a startup once hailed as the next Tesla. Faraday's FF 91 electric SUV boasts some impressive figures, including a claimed 1,050 horsepower. The FF 91 made a splash when it was initially unveiled, and a prototype has even raced at Pikes Peak. However, Faraday's financial issues have continually pushed back the start of production. It's now unclear when the first FF 91 will be delivered to a customer, if that happens at all.