Faraday Future May not Have a Future As Chief Designer Resigns

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【Summary】Troubles continue to mount at electric car startup Faraday Future, as Chief Design Officer Richard Kim unexpected resigns from company, according two people at the company with direct knowledge of the situation.

Original   Eric Walz  ·  Dec 01, 2017 12:31 PM PT
author: Eric Walz   

LOS ANGELES — Troubles continue to mount at electric car startup Faraday Future as Chief Design Officer Richard Kim unexpected resigned from company this week, according two people at the company with direct knowledge of the situation.

Kim was lead designer of Faraday's FF91 electric sedan concept. His last day with the company is Friday. Prior to joining Faraday, Kim was a lead designer at BMW for nearly a decade where he worked on the i8 sports car and the electric i3.

"Richard gave his heart and soul to that company, and he tried to make it work. He's been considering leaving for 2 to 3 months," one of these former employees says. Representatives for Faraday Future could not immediately be reached for comment.

Kim was one of five founders of the company, and was touted as a high profile joining the company after leaving BMW. With his departure, three of those five have now left the company in the last several months.

Key Employees Resign

The news of Kim's departure comes just three weeks after the resignations of Stefan Krause, the company's CFO, and Ulrich Kranz, the CTO. Krause and Kranz, both worked at BMW, and had been brought in earlier in the year to help save the struggling manufacturer.

Alan Cherry, formerly of Tesla, departed as head of HR in August. Another Tesla veteran Tom Wessner, who ran Faraday Future's supply chain group, resigned in October. Leaving Nick Sampson in R&D and Dag Reckhorn as the only two employees left from the original founding five.

Conflict with Jia Yueting

Krause and Kranz had constant clashes with Jia Yueting, who goes by the name YT. According to multiple sources. YT has been controlling the company in the continued absence of a publicly named CEO. Within hours after the two departed, YT sent out an email to the Faraday Future staff accusing Krause of "wrong doings" and causing "damage to the company."

Faraday Future also released a public statement that day which claimed the company was "taking legal actions as a result of Stefan Krause's malfeasance and dereliction of duty."

Krause's departure has been described by a number of former employees and people close to the company as a turning point for the troubled company. Faraday Future is also having trouble keeping some of its remaining employees coming into the office.

According to an internal email obtained by the Verge, only two people were in Faraday's office when YT, the main financial backer and shareholder of Faraday Future, arrived that morning to meet a group of potential investors, indicating Faraday's dire situation.

Faraday's Debt Mounts

Faraday had planned to start construction of a $1 billion factory in Nevada to build the FF91, however the company scrapped the plan after failing to obtain the necessary financing.

The flow of money to the company from YT slowed as he faced increased turmoil among his other companies in China. In July, YT had almost $200 million of his assets frozen by a Chinese court.

According to a Bloomberg report, Faraday Future will be responsible for paying a $400 million convertible note plus 12 percent interest to Chinese investors if it cannot raise $500 million in December. The investment would be used to build its flagship FF91 concept car and advance past the prototype stage. If the funding goes through, all existing debt would be converted into shares.

In another development signaling trouble, Faraday Future ended its Formula E participation as a title sponsor and technical partner to the Dragon Racing team.

In a statement by the company, it said: "we decline to comment, other than we acknowledge that we are in the process of our round A fundraising."

However, if Faraday Future cannot raise a substantial amount of money by this month, it is likely the company will join a growing list of defunct automotive startups.

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