Faraday No Future: Things Looking Dim for EV Startup

Bill Howard

There’s little clarity in the future of Faraday Future, the three-year-old California startup hoping to build high-end electric vehicles. Reports have top executives exiting, Faraday backing away from plans to build a $1 billion Nevada factory, and rumored documents discussing bankruptcy possibilities.

Meanwhile, the company has kept at high profile, sponsoring Formula E (EV) racing, taking part in the Pikes Peak Hill Climb, and engaging large booths at the annual CES shows.

Faraday Future at CES 2017: big booth, big turnout, one car on display.

Stefan Krause, a veteran of BMW and Deutsche Bank resigned in mid-October. He had been brought on in March 2017 as chief financial officer in hopes of securing substantial investment for FF, investment on the order of $1 billion. Jalopnik Thursday reported Krause was likely to be gone in coming days, then learned he bailed a month earlier. According to Jalopnik, Krause confirmed his October 14 departure, declined further comment, and Faraday Future declined comment.

Faraday Future FF 91 climbing Pikes Peak in record time for an EV.

FF sponsored Formula E racing (source: LAT/Formula E)

More executives are apparently going. The Verge said chief technology officer Ulrich Kranz, another BMW veteran, joined in July and “is leaving or has already left the company,” along with Bill Strickland, ex of Ford, charged with running Faraday Future’s future production line.

FF’s initial plan was to create a $1 billion manufacturing facility in Nevada. Faraday had early funding from Jia Yueting, former CEO of Chinese technology company LeEco; Jia was also the controlling shareholder of Faraday Future. Faraday over the summer adjusted its sights downward from new in Nevada to used in the Golden State, leasing an existing manufacturing facility in Hanford, California, 200 miles north of FF’s Los Angeles headquarters. This was arranged by Krause, who pledged the headquarters facility as collateral.

According to Jalopnik, leaked documents say Faraday Future may be considering a bankruptcy filing. FF says that’s not the case, and if there are “bankruptcy documents” being shown around, they’re fake.

All in all, Faraday Future has come a long way down from its aspirations three years ago to create a half-dozen models, at least one of them with more performance than the fastest Tesla. With Krause gone, it’s unclear who at Faraday Future has the ability to bring on new investors. And without new money, Faraday faces a difficult future.