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| © CNET For all the fanfare that came at CES 2017, Faraday has been pretty quiet of late. Let's hope that changes with this new injection of capital. |
By Andrew Krok, Roadshow
Whether you think it's a fledgling car company or a sentient mass of smoke and mirrors, Faraday Future isn't going anywhere any time soon.
Faraday Future announced this week that it has secured government approval for a $2 billion round of equity funding, earning itself a new main shareholder in the process. The initial investment agreement between Faraday and Season Smart Limited came last November, but Hong Kong-based Evergrande Health took over that commitment and the whole thing just received approval from the Committee on Foreign Investment in the United States.
The money won't arrive all at once. Season Smart's initial investment was just $800 million. Evergrande Health will finish the deal with an additional $600 million investment by the end of 2019, and the remaining $600 million will be in place by the end of 2020.
Evergrande Health will become the main shareholder, owning some 45 percent of the company while existing investors will hold a combined 33 percent. The remaining 22 percent of shares have been allotted to Faraday Future's employees in an incentive program. Jia Yueting, the company's founder, will become Faraday Future's global CEO.
So what is this money going toward? "FF will continue to use the committed funds to accomplish our top priority -- finalizing the development and delivering the first production vehicle, FF 91 to both US and China markets," the company said in a statement.
Faraday Future has had its fair share of troubles getting the FF 91 off the ground. It was first unveiled to great fanfare at CES 2017, but in the year and a half that's passed since then, not much has happened. It made a brief off-the-books appearance at CES 2018, and that's been about it. After failing to get its Nevada factory off the ground, the company finally broke ground on a new facility in Hanford, California. At that time, the company estimated that its first preproduction vehicle will roll off the line this August, which seems optimistic.
Whatever comes off that line won't be cheap, though. Reports circulated earlier this year that the FF 91 could cost the equivalent of $315,000 in China. That's a lot of scratch, but with an estimated price of about $250,000 in the US, it's not like it'll be any more affordable in its other market. At that price, it'll be competing with the Bentleys and Rolls-Royces of the automotive industry, which means Faraday's first effort will need to be perfect for it to truly succeed. We'll find out soon enough whether or not that'll be the case.
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