Faraday Future Had the Worst Year Possible For an EV Startup

Stop me if you've heard this one before: Faraday Future is almost out of cash. From a report: At the tail end of 2017, the much-hyped EV startup was sliding toward financial oblivion. But then a crucial round of funding from a then-mysterious benefactor gave the team a lifeline. Faraday planned to finish its first car, the FF 91, and start production before 2019. Like Tesla, the company wanted to usher in a new wave of electric, autonomous and "seamlessly connected" vehicles. But unlike its closest rival, Faraday hasn't spent the past year building and shipping transformative cars. Instead, it's been fighting the investor that decided to bail it out.

The beleaguered EV maker was originally saved by a company called Season Smart, which agreed to invest $2 billion, starting with an $800 million payment, in exchange for a 45 percent stake in the company. In June 2018, Season Smart was acquired by Evergrande Health, a subsidiary of a giant property developer in China, for roughly $853 million. Evergrande took control of Season Smart's stake and agreed to pay the remaining $1.2 billion, split into two $600 million chunks, in 2019 and 2020. As part of the updated deal, it took control of Faraday's assets and intellectual property.

For a while, everything seemed OK. Faraday began constructing a long-overdue factory in Hanford, California, where a Pirelli tire factory once stood. The company hoped it could eventually match Tesla's enormous Gigafactory in splendor and efficiency. But there was a problem. By July Faraday had already burned through its initial $800 million payment. To survive, the startup needed more money -- and it couldn't wait until 2019 for another cash injection.