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It is well known that Jia Yueting has long dreamed of building a car, which led him to leave LeTV and Cool, focusing all his energy on Faraday Future. However, the journey hasn’t been smooth—far from it. Recent reports suggest that Faraday Future may struggle to secure $500 million in its latest financing round, raising concerns about the company’s future.
Once hailed as a potential rival to Tesla, Jia now faces new challenges. According to insiders, the American electric vehicle startup might not be able to close its A-round funding by December. If that happens, a convertible bond worth over $400 million with a 12% interest rate would kick in immediately, adding pressure to an already strained financial situation. The company also owes around $100 million in unpaid bills.
The issue isn't just about raising money—it's about getting it through regulatory hurdles. Chinese authorities have blocked the transfer of funds abroad, making it harder for Faraday Future to access the capital it needs. Despite these obstacles, the company claims it is still in the process of securing funding, though it has little to announce at this time.
Jia Yueting once aimed to combine Chinese capital with Western technology to challenge Tesla. But after stepping down from LeTV, he poured his focus into Faraday Future, hoping to build a $1 billion manufacturing plant in Nevada and create 4,500 jobs by 2017. That plan was later abandoned due to financial constraints.
Faraday Future had previously sought $1 billion in funding, but now the target is lower. If the $500 million round is successful, existing debts could be converted into equity. Meanwhile, some investors like Sunac have already invested billions in LeTV, though Jia eventually stepped down from leadership.
In addition to financial troubles, Faraday Future has faced internal challenges. It defaulted on employee bonuses and salary increases. Former CFO Tefan Krause is reportedly preparing for bankruptcy protection while seeking alternative funding. Some key executives, including former CTO Ulrich Kranz, were recently let go without much explanation.
Despite these setbacks, the company remains hopeful. Potential investors are cautious, however, especially after court-ordered freezes on Jia’s shares. Rumors of a $900 million investment from Tata Motors were denied, and Mahindra & Mahindra is reportedly considering a bid in a court-supervised auction.
Faraday Future continues to push forward, but the road ahead remains uncertain. With mounting debts, regulatory issues, and a shrinking pool of investors, the dream of creating a revolutionary electric car is becoming increasingly difficult to realize.