Latest in Gear

Image credit:

Faraday Future comes crawling back to its main investor

The EV startup can take on much-needed cash, but will backers bite?
Jon Fingas, @jonfingas
December 31, 2018
Share
Tweet
Share

Sponsored Links

AP Photo/Jae C. Hong

Faraday Future is ending its very tumultuous year on a positive note... in a manner of speaking. The electric car startup has reached a restructuring deal with its main investor, Evergrande Health's Season Smart, that will put legal battles in the past and potentially keep the money flowing. The two sides have dropped their earlier contract, and Faraday has pulled litigation that tried to force Evergrande to cough up cash. The pact both lifts a hold on the EV maker's assets and removes limitations on its equity financing, theoretically freeing it to take on financing that just wasn't an option before.

It's not yet clear how this will affect furloughed employees, although their status likely depends on Faraday's ability to attract financing.

That's the real challenge. The company predicted a "breakthrough" in financing and said that investors "all over the world" have already been interested in equity deals. However, it's not clear that backers will necessarily flock to the company's side. It's still destined to burn cash for a long time even if the FF 91 proves a hit, and that still doesn't tackle issues like founder Jia Yueting's various offshore roles or the departure of key executives. While Faraday is no longer knocking on death's door, it's not guaranteed to enjoy a resurgence.

All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.
Comment
Comments
Share
Tweet
Share

Popular on Engadget

iPhone 12 teardown reveals how 5G has changed things

iPhone 12 teardown reveals how 5G has changed things

View
What we bought: Our favorite USB-C chargers

What we bought: Our favorite USB-C chargers

View
Get ready to raid 'Ghost of Tsushima' on October 30th

Get ready to raid 'Ghost of Tsushima' on October 30th

View
A massive spam attack is ruining public 'Among Us' games

A massive spam attack is ruining public 'Among Us' games

View
Custom PS5 covers are already a thing

Custom PS5 covers are already a thing

View

From around the web

Page 1Page 1ear iconeye iconFill 23text filevr