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Jia Yueting, the once-ambitious founder of LeTV, has long pursued his dream of building an electric car. Leaving behind LeTV and Cool, he focused entirely on Faraday Future, hoping to challenge Tesla with a blend of Chinese capital and Western technology. However, the journey has been anything but smooth. Recent reports indicate that Faraday Future may struggle to secure its $500 million financing round, raising concerns about its financial stability.
According to insiders, if the company fails to close its A-round funding by December, it will have to immediately repay a $400 million convertible bond at a 12% interest rate. Additionally, the company is facing unpaid liabilities of around $100 million. The situation has become increasingly dire, as efforts to raise funds for repaying Chinese investors have not yielded results.
Jia Yueting had previously stepped down from LeTV, which was often compared to "China’s Netflix," in order to focus on Faraday Future. Despite high-profile announcements, such as the launch of a powerful Batmobile prototype at CES and plans to build a $1 billion manufacturing plant in Nevada, the company has faced repeated setbacks. The production facility was eventually abandoned, and Jia admitted that LeTV's rapid expansion and over-diversification led to a cash crunch.
Now, Faraday Future needs substantial funding to move beyond prototypes and into mass production. Some sources suggested the company was aiming to raise $1 billion. If the current $500 million financing succeeds, existing debts could be converted into equity. However, potential investors have grown wary, especially after some partners demanded payment and courts began freezing Jia’s shares.
Despite these challenges, the company continues to seek alternatives. Reports suggested that Indian automaker Tata Motors might have invested $900 million, but the company denied the claims. Meanwhile, former CFO Tefan Krause is reportedly considering bankruptcy protection while exploring other funding options.
Faraday Future also announced the termination of contracts with two former executives, Klaus and Ulrich Kranz, both former BMW employees who had resigned earlier. The details of their departure remain unclear, and legal actions are still pending.
As the company faces mounting pressure, the future of Faraday Future remains uncertain, highlighting the difficulties of turning a bold vision into a sustainable business.