A Huge Cash Injection Means Faraday Future Might Finally Build A Car

Electric car startup Faraday Future, which looked dead in the water as recently as six months ago, has been saved at the 11th hour by a massive cash injection that means production can go ahead.

Chinese conglomerate China Evergrande Group is to buy 45 per cent of Faraday Future via its subsidiary Evergrande Health, by buying the holding company that owns the stake, Season Smart. In what sounds like a cheeky tax dodge, Evergrande Health is taking out a high-interest loan from its parent company to fund the move.

The 45 per cent stake has slumped in value from when it was originally sold in November 2017, from $2 billion to $860 million, measured in US dollars. Evergrande Health will reportedly still have to pay the full $2 billion due to the agreements made by Season Smart. At the current share price, the difference amounts to a big cash boost.

When we last reported on this saga, Faraday Future founder Jia Yueting had been blacklisted by the Chinese authorities and had seen millions of dollars’ worth of assets frozen over an outstanding debt. Not for the first time, either.

The cash injection now means that the FF91, the car that set such an impressive time at Pikes Peak in stripped-out form, can enter a volume production phase. Maybe.

Source: Reuters