Core executives resigned one after another: What happened to Jia Yueting’s Faraday Future?

Half is flame, and the other half may also be flame.

Perhaps for Jia Yueting now, nothing is more important than Faraday Future in California, USA, even though LeTV, which he founded, has changed its name and has basically no intersection with him, and even though LeTV Holdings, a non-listed system, has a lot of work to do. Only by completing Faraday's $1 billion financing and mass production of new cars as soon as possible can his car dream continue, and he may return to China as a winner again.

Three months have passed quickly. Although there are constant reports that Jia Yueting frequently meets with investors, there is still no news about Faraday Future's imminent $1 billion financing. According to Faraday Future's original plan, this financing should have been completed by the end of July this year. What happened to Faraday Future? Can it still complete the financing in time?

This question is like a shadow, hanging over the hearts of more than 1,000 employees of Faraday Future. As time goes by, more and more employees begin to lose patience and bid farewell to this electric car startup whose future is still uncertain, including Faraday Future's founding fathers.

Just this past week, Faraday has lost the heads of three core departments: Tom Wessner, head of supply chain management, Pontus Fontaeus, director of internal design and branding, and Michael Hsu, head of IT systems. Fontaeus joined Faraday in March 2015 and was responsible for Faraday's internal design, branding, and UI/UX. Before joining Faraday, he worked for Volvo, Ferrari, Kia, Volkswagen, General Motors, Land Rover and other companies for thirty years.

However, among the three, Wessner's departure has attracted the most attention. He has more than 25 years of experience in the automotive industry. He was once Tesla's purchasing director, which directly ensured Tesla's successful launch of the Model S, turning it from a small startup struggling on the brink of life and death into the focus of the industry today. After joining Faraday, he continued to be in charge of the core department of supply chain management.

As one of Faraday Future's early core executives, Wessner's departure is seen as a dangerous signal - even those who participated in building the company no longer believe in the future. This is also in line with the large number of middle and senior management resignations at LeEco Holdings in China. In August this year, Alan Cherry, another founding member of Faraday Future and vice president of human resources, also announced his resignation.

Faraday Future once ambitiously planned to invest $1 billion to build an electric car factory in North Las Vegas, Nevada. However, due to a lack of funds and overdue project payments, the factory project in the desert has been suspended since November last year, and only about half of the land leveling has been completed. Because of this investment project, the Nevada State Treasurer even directly criticized LeEco as a Ponzi scheme, and publicly fell out with the Governor of Nevada and the Mayor of North Las Vegas.

In August this year, FF finally decided to find another location and rented an abandoned factory in Hanford, a small city in central California, to renovate the factory and install a production line to produce the first mass-produced car FF91, which was released in January this year. Compared with continuing to build a new factory in the desert and re-manufacture cars, renovating an old factory in California, which has convenient transportation and complete facilities, will obviously save more money and time.

However, even if the factory problem can be solved by renting a factory, financing is still the key to whether FF91 can be listed and whether Faraday can continue to survive. On this life-and-death issue, Faraday has delayed for two and a half months. They should have completed the financing by the end of July.

In May this year, Faraday Future invited Stefan Krause, the former CFO of BMW and Deutsche Bank, to serve as the company's CFO. According to media reports, after Krause took office, he began to actively contact investors and planned to complete a $1 billion financing within two months. This is also the first public financing since Faraday Future was founded. Jia Yueting himself will not participate in this round of investment.

In August this year, Faraday Future obtained a $14 million loan by mortgaging its Los Angeles headquarters. But this is just a drop in the bucket for the electric vehicle industry, which has huge capital demands. An insider told Sina Technology that Faraday Future's monthly operating expenses are between $15 million and $20 million. However, at least so far, Faraday Future has not defaulted on salaries or made large-scale layoffs.

An executive who has left LeEco Holdings told Sina Technology, "Jia Yueting was too slow in raising funds. He wanted to independently support Faraday to start building a factory and even manufacture cars, so that he could get the biggest piece of the pie. But this also directly led to Faraday's financial difficulties, and the Nevada factory was forced to stop production due to arrears in project funds. Looking at NIO, which successfully raised funds in China, it is in stark contrast to Jia Yueting's Faraday. If Faraday had raised funds in advance, it would not be facing the current predicament."

So, what is hindering Faraday Future's financing? The manager revealed, "I don't know the specific situation, but it should be Jia Yueting and LeEco that have affected Faraday Future. Faraday Future has a strong enough technical team and patented electric vehicle technology, which should have attracted investors. But now LeEco Holdings is in such a bad situation, Jia Yueting has become a dishonest person, and has been labeled as a 'runaway', so investors must be wary. If he is willing to withdraw, investors are willing to take him in, but now the only opportunity Jia Yueting can seize is Faraday Future, and he will definitely not be willing to let it go."

A Chinese-American employee at Faraday Future shared the same concerns. "With no news on financing, we are all worried that the company will sink along with Jia Yueting. Although we haven't left yet, we all agree that the less Jia Yueting is involved in the company, the better for Faraday Future. We really don't like his team. He has lost his credibility, and I think investors will think the same way."

The employee also mentioned the cultural conflict within Faraday Future. "Jia Yueting's position is not just the CIEO (Chief Internet Ecosystem Officer) on LinkedIn, he is the chairman of Faraday Future. And he has brought too many of his cronies to the company. I'm not saying that these cronies of Jia Yueting are bad, they are just Jia Yueting's loyal agents, but they do have differences with the US team on many issues. Jia Yueting is a very stubborn person, and perhaps only CFO Krause can convince him now, because Faraday Future's survival now depends on Krause's financing ability."

He also revealed, "We have heard rumors that if financing is unfavorable, the company may be sold to an auto giant. But in this case, the buyer will definitely lower the price significantly, and it depends on whether Jia Yueting can accept it. If he is unwilling to sell, then the fate of the company is completely tied to him. To be honest, even if the car is really built, sales and production capacity are a big problem."

An interesting topic is that there are few startups like Faraday that are so secretive about their founding history, and there is no clear founder and CEO. On the other hand, Jia Yueting and LeEco have never been willing to clarify their relationship with Faraday, always calling it a "strategic partner". For a long time, Jia Yueting even refused to admit that he had invested in Faraday.

Faraday Future is a company that Jia Yueting created and owns. He found former Tesla engineering director Nick Sampson through Nie Tianxin, an executive of LeTV's Los Angeles department, and recruited a group of middle-level managers from Tesla's core departments and senior technical personnel from the automotive industry to establish Faraday Future in early 2014. At the beginning, the startup was still named LETV ENV.

This is why Faraday does not have a founder or CEO, because Jia Yueting has been the sole controller of Faraday since the beginning, and everyone else is just a founding employee. For a period of time, the CEO position of Faraday was even nominally held by Deng Chaoying, a manager of LeTV Pictures in Los Angeles. In fact, she was Jia Yueting's agent in Los Angeles, handling all matters from buying luxury houses to registering companies for Jia Yueting.

However, it was not the intention of the Faraday Future US team to be so secretive about the company's history. This is also what the Faraday Future US team dislikes. The American employee mentioned above revealed to Sina Technology that we don't know why they are so secretive, and it doesn't conform to the culture of American startups at all. We don't even have a CEO.

But the former employee of LeEco Holdings gave this guess: "2014 was a sensitive period for Jia Yueting. He didn't want the outside world to know that he had invested in and registered a company in the United States. Moreover, Faraday Future was Jia Yueting's personal investment company, and he didn't want the outside world to confuse Faraday Future with LeEco."

"According to Jia Yueting's strategy, Faraday will be responsible for the research and development of advanced electric vehicle technologies, and its products will focus on the high-end market; while LeTV Auto will use Faraday's designs and technologies and focus on the mass market in China. In addition, LeTV Auto will be responsible for the research and development of technologies such as the Internet of Vehicles. Jia Yueting acquired Yidao Car Rental in the hope that Yidao would be the first to purchase LeTV cars," the person explained.

"I see that there are still some people who are still sticking to LeEco Auto and forwarding Jia's dream on WeChat Moments. I don't know whether they really believe it or not. Maybe they will have a good turn, or maybe they will all be disillusioned in the end. I no longer believe in Jia, and I don't want to hang myself on this tree."

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.