EV Startup Faraday Future Faces New Financial Hurdle

Electric-car startup Faraday Future Inc. faces a December deadline to raise $500 million in new funding to avoid an immediate call on a previous $400 million convertible note, sources tell Bloomberg News.

The Gardena, Calif.-based company also has about $100 million in unpaid bills due, according to the report.

Faraday Future was founded by Chinese internet tycoon Jia Yueting. The company showed off an exotic, 1,000-hp prototype electric supercar at CES two years ago and declared it would begin manufacturing a bevy of more mainstream EVs this year. The company said it would open a $1 billion factory in Nevada and produce the cars at an annual rate of 150,000 units.

But by late last year Jia conceded he had overextended himself with multiple business projects and was running out of cash. Faraday Future’s ambitious model lineup and aggressive production plans were sharply scaled back. Jia stepped down as head of his LeEco media company in May to focus on EV development.

Faraday has lined up a $30 million bridge loan but is still trying to find investors for the $500 million funding round, according to Bloomberg’s sources. They say Stefan Krause, the startup’s chief financial officer until his departure in October, had prepared filings for a Chapter 11 bankruptcy filing, but Jia rejected that option.