Faraday Future Secures $14 Million Rescue Loan
Faraday's future is secure...for now.
Faraday Future may live to fight another day, thanks to an emergency infusion of cash from a new source. The startup automaker secured a $14 million rescue loan from New York investment firm Innovatus Capital Partners, reports The Wall Street Journal.
Faraday reportedly put up its California headquarters as collateral on the loan, which will provide much-needed funding in the wake of financial troubles at Faraday backer LeEco. The EV maker previously relied on the Chinese tech giant and its billionaire founder, Jia Yueting, as its main source of funding. But LeEco has had its own issues, due, in part, to a rapid expansion of its business into the automotive sector. Last month, a Chinese court froze a significant amount of Jia's assets because of missed loan payments.
At roughly the same time, Faraday halted work on its factory in North Las Vegas, Nevada, which had not progressed very far in the first place. Faraday is now close to securing a different factory site in California, according to Business Insider. The new factory will likely be smaller than the original, which would have sat on a 900-acre site. Faraday promised the Nevada government that it would invest $1 billion, and received tax breaks and other incentives based on that promise.
It's unclear exactly where Faraday will build a factory in California. Despite the success of Elon Musk's Tesla and SpaceX manufacturing operations, the Golden State's plethora of environmental regulations still make it a difficult place to set up a factory. Faraday previously investigated a factory site in Vallejo to supplement its Nevada factory, but opted out of that site.
Despite the problems at LeEco, Jia is doubling down on Faraday. He recently stepped down as CEO of LeEco parent Leshi, and will assume the role of chairman of Faraday's global executive board. This marks the first time Jia has held an official position within Faraday. Current Faraday CFO Stefan Krause, a veteran of BMW, will also become Faraday's new COO.