The electric vehicle company founded by Jia Yueteng, Faraday Future (referred to as “FF”), has encountered new troubles again and again.
According to domestic media reports, two FF employees, Jose Guerrero and Victoria Xie, reported that a portion of the few cars delivered by FF so far were forged, and pointed out that FF founder Jia Yueteng had “weaponized” the company’s human resources department to retaliate against anyone who exposed these untrue sales. For this reason, the two internal whistleblowers filed two new lawsuits in the Los Angeles Superior Court against FF, Jia Yueteng, and the company’s human resources director, Yang Nan, accusing them of illegal dismissal, breach of contract, and mental injury.
In response to the above news, at noon today, both Jia Yueteng and FF have made responses.
Jia Yueteng said: “A statement regarding the lawsuit filed by the recently fired employee: I believe there are a large number of false statements and slanders in the complaint, which are intended to conspiracy to retaliate and extort. I will file a counterclaim against these two people!” FF posted on its official Weibo: “FF takes these two lawsuits filed by former employees very seriously. The company believes that we have sufficient reasons based on the facts to respond to the allegations in the complaint. At the same time, the company will take all necessary measures to protect the company’s reputation and all employees from various allegations and violations, including personal attacks.”
According to media reports, the aforementioned mentioned lawsuit occurred on December 6, 2023. At that time, FF’s sales and after-sales director, Guerrero, submitted an internal report letter to the FF general counsel, claiming that FF lied about the sales of the first four FF91s. In the sales process, three of the four FF91s were announced as delivered before the completion of the sales process, and only one received the full payment 60 days after the delivery was completed, with the aim of raising the company’s stock price by announcing sales. In addition, the two employees mentioned above pointed out that the leadership team of Jia Yueteng’s department stated: “It is necessary to raise the company’s stock price by announcing sales, and employees who raise compliance issues will be subject to retaliatory actions by the human resources department.”
It is worth mentioning that in February 2022, FF was also exposed for fudging order data. At that time, the special committee underwent independent auditing, and FF stated: The previously claimed receipt of more than 14,000 reservations for FF91 vehicles may be misleading, as only a few hundred reservations have been paid, while the others (a total of 14,000) are unpaid.
Looking back on the FF car-building process, it has been nearly 10 years since FF started building cars, but so far, it has only delivered 11 new cars, and the fourth car owner is Jia Yueteng himself.
What is even more surprising to the outside world is that in March this year, FF also filed a recall plan with the NHTSA, recalling the 11 delivered FF91s. The reason is that the system cannot normally remind consumers that there is a fault in the safety airbag. For this, FF will update the software of the iHUB module through OTA upgrades, and the owner notification letter is expected to be mailed on March 15, 2024. On April 8, FF announced that it has completed the release of remote OTA software updates, which corrected the potential safety risks identified in the previous active recall. This year marks the tenth year since Jia Yueting founded FF to build cars. Currently, FF only has one mass-produced model, the FF91. It took nearly 9 years from mass production to delivery. In 2014, Jia Yueting created FF and completed a $1 billion A-round financing in the following year. Afterwards, due to the LeEco system’s financial crisis, Jia Yueting went to the United States and eventually, FF also faced a financial crisis, and the car-building project came to a standstill. In January 2017, on the other side of the Atlantic, FF released its first flagship model, the FF91, claiming to be “the world’s first internet ecosystem electric vehicle”. In the following few years, FF has held several quasi-mass production launch events, but contrary to expectations, they were all ultimately repeatedly postponed due to operational difficulties. It was not until April 2023 that FF announced the completion of the production of its first mass-produced car, the FF91 Futurist, and it rolled off the production line at the FF ieFactory in California.
At the end of May 2023, Jia Yueting announced the listing of the FF 91 2.0 Futurist Alliance, which offers three models: the FF91 2.0, the FF91 2.0 Futurist Edition, and the FF91 2.0 Futurist Alliance Edition. Among them, the price of the FF 91 2.0 Futurist Alliance is $309,000, with a global limited edition of 300 units. In the same year in August, FF delivered the first FF91 and held a new car’s first user delivery ceremony, and the founder Jia Yueting personally completed the delivery to the user.
It should be noted that although FF has started delivery, it has not received a positive response in the capital market. In addition, previously, FF had received a delisting warning from Nasdaq because the stock price was below $1 for 30 consecutive trading days. According to the listing rules, FF needs to bring its stock price back to $1 in the next 180 days, that is, before June 25, 2024, and maintain it for at least 10 days, otherwise, it will face delisting. According to Wind data, in 2023, the stock price of FF dropped by 98.94%.
The latest financial report data shows that in the third quarter of 2023, FF had a net loss of $78 million , but it generated revenue for the first time, with a total of $551,000 in auto sales revenue (approximately RMB 4.02 million). As of the end of September 2023, FF has only about $8.5 million in cash on the books, of which $1.85 million is restricted cash.
Since FF started building cars, it has invested approximately $3 billion (approximately RMB 21.9 billion), but only produced 11 cars. Now, FF is already heavily in debt. In February this year, the landlord of FF’s Los Angeles headquarters, Rexford Industrial Company, filed a lawsuit against FF in the Los Angeles Superior Court, accusing it of owing rent for January and February, as well as related maintenance fees and taxes, totaling $91,000 (approximately RMB 660,000) in rent. Therefore, the landlord requested to take back the building. On April 9, the latest report stated that the two parties have reached a settlement, but the specific agreement details are not convenient to be disclosed.
As one of the earliest new car-building forces to enter the market, FF has only delivered 11 cars in nearly 10 years of building cars, and in essence, it is not much different from “PPT car-building”. Furthermore, even if the FF91 has been produced, it is difficult to open the market. From the positioning and price of the FF91, the FF91 is positioned as a luxury car, and the high price of up to 2 million yuan is not suitable for the mass consumer market and it is difficult for consumers to be willing to pay for it.
The competition in the auto market this year will only be more intense, and the chances and time left for FF may only be even less. Let’s wait and see whether Jia Yueting, who chokes on his dreams, can still survive. As of the time of submission, the FF stock price closed at $0.112, up 24.44%, with a total market value of $4.7708 million.
