The secretive Chinese-backed electric vehicle company Faraday Future is running out of roadway.
There were several news reports about the company’s financial distress and unstable business operations in the weeks leading up to the highly anticipated launch of Faraday Future’s production vehicle last night at CES 2017.
“If they don't find money after CES…they will be out of money by February,” a former executive told The Verge. A former employee familiar with Faraday Future’s finances told BuzzFeed that the company is more than 30 days overdue on more than $100 million worth of payments to vendors and suppliers. The electric vehicle (EV) manufacturer currently faces lawsuits from a supplier and a landlord.
It’s been a year since Faraday Future, or FF, emerged from stealth mode. At CES 2016, FF launched an electric supercar concept that was lambasted for being ridiculously out of touch with market wants and needs. The FFZero wasn’t anything like the autonomous consumer car FF had been teasing on social media. The FFZERO wasn’t even functional.
Since the first launch, FF has seen a slew of employees leave the company. Top executives Joerg Sommer, vice president of product marketing and growth, and Marco Mattiacci, global chief brand and commercial officer, left the company just days before last night’s big reveal.
The launch event did not disappoint in its grandeur -- but it did little to ease concerns that the FF 91 is no more than a hype machine.
Company leaders announced some impressive stats. The FF 91 has a 130-kilowatt-hour battery with a 378-mile all-electric range, a 1,050-horsepower engine, and a 0-60 mph acceleration time of just 2.39 seconds. Executives showcased the FF 91’s speed in a simulated drag race with a Bentley Bentayga, a Ferrari 488 GTB and a Tesla Model S. The audience watched each vehicle zip across the pavilion. No surprise, the FF 91 appeared to win.
The FF 91 isn’t only designed for speed -- it’s also equipped with a suite of self-driving technologies, including 10 cameras, 12 long- and short-distance radars and 12 ultrasonic sensors. The car can park on its own. The FF 91 can also interact with the driver using facial recognition technology to automatically adjust vehicle settings, and help the driver reach the outside world through on-board high-speed Wi-Fi.
Nick Sampson, FF’s senior vice president and de facto spokesperson, said interested customers can now sign up for one of the company’s 300 Alliance Edition launch vehicles, set for release in 2018, by putting down a $5,000 refundable deposit. A portion of the proceeds will be donated to an environmental production fund, to be named at a gala in March.
“We have to flip the automotive industry back on its head, break it down and build it up the way it should have been in the first place, independent of fossil fuels,” said Sampson.
Nothing was said at the launch event about FF’s financial standing, or even about the company’s production plans. Executives didn’t even disclose the FF 91’s final price. However, at the end of the event, Sampson did address the company’s critics.
“Despite all of the naysayers and skeptics, we will persist,” he said. “We will carry on to make the impossible, possible.”
If Faraday fails, it's a loss for EVs
During the nearly 90-minute CES presentation, company leaders painted a picture of how the FF 91 could alter the current driving experience. The crossover design has a full-length sunroof that’s intended to enhance the passenger experience, as well as a similar look to the Mercedes’ 2015 self-driving concept car. The FF 91’s powerful electric drivetrain also makes it fun to ride in and emissions-free.
But it’s not just a vehicle; it’s a “mobility ecosystem.” The FF 91’s connected and autonomous vehicle technologies make transportation personalized and convenient -- when the technology works. Creating an “FFID” account for each person in the car enables the vehicle to remember seating and entertainment preferences that can be transferred across the FF EcoSystem -- a concept that seems to lend itself well to car sharing.
Considering that the vast majority of cars today sit idle 95 percent of the time and spew out harmful pollution while they’re in motion, the FF 91 EV seems to be moving the auto industry in the right direction -- although the lack of information on FF’s rollout plan make it hard to see how the company will progress.
“FF packed a punch with its first production vehicle, FF 91, crammed with eye-popping specs compared to all electric and/or luxury vehicles on the market today, but the launch event left many questions unanswered (not completely unlike its competitor Tesla’s prior launch events) on matters of practicality such as price tag, production timelines, and targets,” said Ravi Manghani, GTM Research energy storage analyst, who also tracks EVs.
“While the presenters very deliberately mentioned the company as a risk-taker that’s not burdened with prior history, it will be almost impossible to disassociate from the recent negative coverage of its financial troubles,” he added.
It’s important to cut through the PR spin, but it’s also important to consider how FF fits into the larger EV and mobility story. It’s difficult to launch a new automotive company, and an electric one in particular. Only Tesla has been able to pull that off in a meaningful way in recent years, and even Tesla’s fate is still far from certain.
While FF lacks a charismatic cleantech hero like Elon Musk as CEO, the company is still fostering innovation. As Electrek’s Fred Lambert recently pointed out: “There’s no doubt that they are over-hyping their products for a company at this stage of development, but they also have over 1,000 employees -- most of them engineers -- working on real electric-vehicle technologies, and that’s not vaporware.”
Faraday Future is in trouble, but that doesn’t mean the staff and the concepts are bad. If FF does fail, it would be a black eye to the entire EV sector. FF’s demise could spook investors and keep them away from EV technology for years, the way the bankruptcies of Fisker and A123 did in 2013. Furthermore, a bankrupt EV company gives ammunition to cleantech opponents, in the same way Solyndra’s bankruptcy has hurt the broader solar industry.
“As consumers watch the industry evolve and see more EVs hit the road, and the Trump administration assesses the state of regulation and advanced vehicle technology, high-profile setbacks will do lasting harm to the EV industry, which has shown such promise and is so critical to severing our oil dependence,” said Robbie Diamond, president and CEO of Securing America’s Future Energy, a Washington, D.C.-based nonprofit focused on reducing U.S. oil dependence.
Just because FF’s work has purpose (at least to some), that doesn’t make the company’s problems go away. FF leaders need to be careful not to over-promise and under-deliver, said Diamond. At the same time, if the company manages to build strong interest in its new product, it could help FF raise the money it needs to realize the vision.
What’s up with Faraday anyway?
Things have always been a little weird at Faraday. The company was founded in 2014, but has never had an official CEO.
It was also initially unclear who was backing the company, which turned out Jia Yueting, founder of Chinese tech giant LeEco. Ding Lei, a top executive at LeEco was reportedly serving as FF’s “global CEO," but recently left the company.
LeEco, meanwhile, is developing an electric car of its own called LeSEE, and has a partnership with Aston Martin separate from Faraday.
Putting aside negative response to the FFZero at CES 2016, FF appeared to be on a roll early on last year. The company was scooping up employees from Tesla, Apple, BMW and other top tech brands. In April, FF was ramping up its $1 billion manufacturing plant in Nevada, where the state legislature approved $215 million in tax incentives.
Then things really started to go downhill. Last summer, Jia sent a letter to employees acknowledging that LeEco had overextended itself. In November, news broke that FF has stopped working on the Nevada factory.
Despite facing economic woes, LeEco just broke ground on its own $3 billion Chinese EV manufacturing plant. There are doubts as to whether FF or LeEco will actually be able to bring a car to market.
Jia, who attended last night’s FF launch event, seems committed to keeping the dream alive. “We share a dream to restore the blue sky,” he said.
“I’m willing to devote everything to my dream -- even my life.”