Faraday Future, once hyped as a legitimate challenger to electric car industry leader Tesla Motors, finally unveiled a production electric vehicle at CES 2017. Named the FF 91, the company showcased the electric vehicle's specifications and features to compensate for the disastrous showing at CES 2016, when it only revealed the non-functional concept FFZero1.
However, Faraday Future's demonstration of the FF 91 hit a snag at the annual event, as the vehicle refused to move once it was time to show off its self-parking technology. Apparently, the glitch was an indicator of even deeper troubles that the company is currently facing.
Faraday Future 'In Shambles'
According to a lengthy report by Business Insider on the state of Faraday Future, interviews with eight unnamed people with knowledge of the business of the electric car company revealed that Faraday Future was "in shambles," with over a half-dozen senior executives leaving since last year's spring. One of these executives was the company's global CEO, who vacated his position right before CES 2017.
The people that Business Insider interviewed, who are made up of former and current insiders of Faraday Future, revealed that the company's debt has ballooned to millions of dollars. In addition, the corporate structure between the United States and China operations was described as "chaotic."
The most immediate challenge that Faraday Future is facing, according to the insiders, is the company's shortage of cash. One of the sources said that, if the company's showing in CES 2017 is not able to attract new investors, Faraday Future might close down between February and May this year.
Several Challenges For Faraday Future
Since the departure of Ding Lei, who acted as Faraday Future's global CEO until late 2016, the sources claimed that Faraday Future cofounder and LeEco CEO Jia Yueting has been acting as the unofficial CEO of the company. However, with Jia directing Faraday Future's teams and making decisions for the company, Faraday Future has become a de facto subsidiary of LeEco rather than an independent business.
Many of the troubles that Faraday Future is experiencing was said to be due to this confusing setup, as the company had no choice but to accept Jia's decisions, as he was the one providing the funding. As such, many arrangements that were made were put toward LeEco's own vehicle development, as opposed to such for Faraday Future.
The troubles extend to the company's first production plant, which broke ground in Nevada in April 2016. One of the sources said that work at the location "stopped almost as soon as it started."
At CES 2017, Faraday Future cofounder and senior VP of research and design Nick Sampson said that work at the Nevada plant was halted in October to allocate the funding to its CES presentation. Sampson then admitted that the company was suffering from limited resources, a statement that has turned out to be worse than expected. The sources added that Faraday Future owes suppliers up to around $300 million, with no indication being given to the company on when funding will arrive.
Faraday Future And The FF 91: Just An Illusion?
"All that stuff at CES was just a bunch of bulls---," according to a highly placed source within the company, with another source claiming that the FF 91 shown off at CES 2017 not close to being completed despite claims that it would start production in 2018.
Nevertheless, that did not stop Jia from stating that the FF 91 will cost less than 2 million yuan in China, which is equivalent to about $290,000. The vehicle will likely have a lower price in the United States at about $150,000 to $200,000, which are prices that will not allow it to pose a significant challenge to the offerings of Tesla Motors.
The FF 91 might not be the only illusion, though, as it seems that Faraday Future is now facing insurmountable challenges. One source even said that the company may be forced into bankruptcy if its expected funding from China will not arrive within 60 days.
