Faraday Future (FF), an electric car startup that intended to compete with Tesla, is furloughing hundreds more employees. More cash shortages is forcing the layoff, and this is after placing hundreds of employees on unpaid leave in October, 2018. It was in October that it lost some employees stolen from other companies such as GM, Apple and Dag Reckhorn from Tesla was the last to resign of the original 5 founders. Even before the furloughs FF laid off workers and cut salaries in an attempt to roll back expenses.

When co-founder Nick Sampson resigned in October, he said in his resignation letter, “he company [FF] is effectively insolvent in both its financial and personnel assets”.

At least Dag Reckhorn was thoughtful enough to create a fund for struggling employees,

“…think[ing] about opening an emergency fund” for employees in “dire needs” as a result of the furlough, and that he’s putting in $10,000 to start. “Other colleagues are free to join and donate as well,” he wrote. The hope is to “help [employees] as best as the available funds allow.”

The major problem FF is facing currently comes from one of its biggest financial backers. A Chinese real estate heavyweight, Evergrande.

It’s a surprise the company lasted this long. An article from December 16, 2016 from Jalopnik, Inside Sources Say Faraday Future Is A Bigger Catastrophe Than You Can Possibly Imagine stated,

“Sources close to Faraday Future, including suppliers, contractors, current, prospective and ex-employees all spoke to Jalopnik over a number of weeks on conditions of anonymity and said the money has been M.I.A., the plans are absurd and the organization verges on the dysfunctional”.

Besides the epic fail at CES 2017, Faraday Future continued to miss deadlines and not paying suppliers, FF did not deliver a working production model in 2018 of 400,000 cars as promised.


Original funder and now CEO YT Jia, is a Chinese entrepreneur who founded the country’s first paid video streaming service LeTV or Le.com, dubbed “The Netflix of China”. Jia also founded LeEco which include smartphones.  After 2016, capital was desperately needed from another source since Jia’s other companies were experiencing cash crunches.

Jia’s relationship even went sour with Nevada state officials after promising to build a factory with great government incentives.  However, plans were officially scrapped in November, 2017.



Planned vs Actual for Nevada, north of Las Vegas.  Faraday Future has since settled in Hanford, CA in an old Pirelli tire factory.



Smart King Ltd a Cayman Island based company worked with FF and set up Season Smart Ltd that saved FF towards the end of 2017. Season Smart invested $2 billion and took 45% share of the new entity, FF’s previous shareholders kept 33% and the final 22% equity was reserved for company management. After the deal was struck, Season Smart Ltd took the place of Faraday Future as the assignee on the car company’s patents and trademarks in the U.S.

Fast-forward to June 2018, Chinese conglomerate, Evergrande Health Group (Evergrande) acquired 100% of Season Smart Ltd for $860 million. This was before Smart King fully paid the $2 billion owed to the merger. Smart King paid $800 million worth of investment and scheduled themselves to pay the remaining $1.2 billion in installments of December 2019 and December 2020.

Yet, this is not the end of external funding needed. FF is actively seeking another $500 million from outside investors to remain viable throughout 2019.

This funding is sought because the Evergrande is blocking further investments. Many believe that Evergrande is positioning itself for full take-over once the company becomes insolvent.

YT Jia emphasizes on the company’s latest news article,

“FF’s recent financial crunch, which was brought about by investor Evergrande Health refusing to make scheduled payments, has helped fortify new leaders in the company and refocus its goals as a nimbler startup at the cusp of disrupting the automotive and mobility industries”.
“With a new, leaner organizational structure, the FF executive team is receiving interest from investors from around the world who see strong value in FF’s seasoned tech and automotive management; its nearly 400 patents; and more than 1,000 patents pending. Turning its situation into an opportunity, FF is considering various equity- and debt-backed financing plans, culminating with a proposed IPO run-up, which FF is exploring for 2020”.

So, there is hope they can continue development outside the financial leash of Evergrande. Even to the point of entertaining funding from a crypto infused modified Initial Coin Offering fund raise called a Securitized Token Offering (STO).

CCN posted a paid-for press release,

“According to Patrick De Potter, CEO of EVAIO Blockchain, EVAIO has contacted Faraday Future to invest 900 million USD over 3 years via indirect STO and now is connected with FF’s financial partner Stifel to start the discussion of the detailed plan.
Patrick said on LinkedIn: “We have been following the electric vehicles developed by Faraday Future when we worked at Tesla. FF91 is one of our favorite EVs.” If this cooperation finally achieves, Faraday Future may be able to obtain support from the crypto world in the next few years.
The blockchain company EVAIO said they were aiming to build a blockchain for electric vehicles and successfully completed EVA token private sale earlier this year. Most of the team members of EVAIO are ex-tesla managers combined with specialists in crypto and blockchain”

If a blockchain based investment is initiated for this company and failure continues, it will be the biggest blockchain rip-off investment to date.


Your Remaining Votes (within 24hrs) : 10 of 10
2 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 5 (2 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
(343 total tokens earned)