Faraday Future Co-Founder Sampson Resigns

Nick Sampson, a co-founder of struggling electric car startup Faraday Future Inc., has resigned, declaring the company “virtually insolvent,” The Verge reports.

The tech industry publication says Peter Savagian, a former General Motors Co. executive who headed Faraday’s technology and product development, quit on Monday.

Last week the Los Angeles Times reported that Faraday cut salaries 20% and announced plans for significant layoffs. This week the company’s remaining co-founder, Chinese internet tycoon and Faraday CEO Jia Yueting, told employees that many will be placed on unpaid furlough through December, or until the company can secure new funding.

The drastic cutbacks make it unlikely that the company will be able to execute the planned launch of its first model—the $180,000 high-performance FF 91 crossover—by the end of this year.

Faraday’s latest financial crisis is a result of a fight with its biggest investor, Chinese real estate giant Evergrande Group. Evergrande’s health division agreed in July to invest $2 billion in Faraday over three years, assuming the startup meets undisclosed performance goals.

The deal gave Evergrande, which paid an $800 million installment early this year, a 45% stake in Faraday. That payment was spent in five months, and Evergrande balked at further investments. Jia, a Chinese internet tycoon, filed a lawsuit demanding that Evergrande make agreed payments.

The dispute blocked other investors until a Hong Kong arbitration court ruled earlier this month that Faraday could pursue other funding while it continues its fight with Evergrande.