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Troubled EV maker Faraday Future cruises into China

Written by Jiaxing Li Published on   2 mins read

Faraday Future has formed partnerships with Chinese automakers to sell cars in the world’s largest EV market.

Controversial electric vehicle startup Faraday Future is collaborating with Chinese car manufacturer Geely and is in talks with local governments to bring its EVs to China, the company said on Sunday.

Faraday Future and Geely have made “substantial progress” in their collaboration, said Xuefeng Chen, the company’s newly appointed China CEO, during the company’s annual “919 Futurist Day” event held in Beijing. The two companies’ R&D teams are working closely together to prepare for the launch, Chen added.

Faraday Future’s China manufacturing facility is expected to be located in the southern city Zhuhai, according to an unnamed source quoted by 21st Century Business Herald. The company had registered a subsidiary in the city in December 2020, taking advantage of local policies that are favorable to NEV developers.

Two Zhuhai-based conglomerates, Gree and Huafa Group, invested RMB 2 billion (USD 310 million) in Faraday Future in January. An asset management firm backed by the Zhuhai government pledged to do the same, but pulled out of the deal just before Faraday Future went public on the Nasdaq in July, as it was unable to acquire sufficient foreign currency for payment under Beijing’s strict foreign exchange policy.

The EV startup ended up raising USD 1 billion through a special purpose acquisition company deal. That financial lifeline will be put toward mass production and delivery of Faraday Future’s FF 91 model—which is often described as a competitor to the Tesla Model S—within a year, the company said.

So far, Faraday Future has not yet implemented mass production. Chen estimated that the China market would account for over 70% of the company’s total sales. The CEO said the FF 91 can be reserved through Faraday Future’s newly launched app, and the company has received over 400 orders from customers in China so far.

Faraday Future’s subsidiary in Zhuhai is located on Hengqin Island, an economic cooperation zone that is connected to Macau via a bridge. Faraday Future may consider a joint venture—possibly with entities backed by the Zhuhai government—if there are favorable changes in policies and tax rules for EV manufacturers.

Once hyped as a “Tesla killer,” Faraday Future has taken multiple embarrassing turns and its founder, Jia Yueting, underwent bankruptcy procedures in 2019. Evergrande, the real estate giant that is on the brink of collapse, invested USD 800 million in the company in early 2018, with a clause to disburse an additional USD 1.2 billion over two years if certain undisclosed goals were met.

Jia said on Monday that Faraday Future will deliver vehicles to buyers on time and the company will challenge incumbent luxury auto brands. “Our priority is to deliver the FF 91 to the hands of our global users, disrupt traditional ultra-luxury brands like Maybach, Ferrari, and Bentley, and become No.1 in the global ultra-luxury user segment,” Jia said in Los Angeles during the 919 Futurist Day.

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