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Cash-starved Faraday Future to get $900 million from blockchain company
Electric cars and blockchain, two of the hottest concepts in the tech world, have been brought together. Faraday Future, the electric car startup aiming to challenge Tesla, may secure a $900 million funding package from EVAIO Blockchain, releasing the company from exacerbating cash pressure.
The funding will be invested over three years via indirect STO (security token offering), according to Patrick De Potter, CEO of EVAIO Blockchain, who first broke the news on LinkedIn. “FF and EVIAO will now start up the discussion for details of the plan,” he noted.
EVAIO said they were aiming to build a blockchain for electric vehicles and successfully completed EVA token private sale earlier this year. Most of the team members of EVAIO are ex-Tesla managers combined with specialists in crypto and blockchain.
De Potter, a former Tesla EMEA leader, says his team has been following Faraday Future and finds FF91 “one of their favorite EVs.” He further expounded: “If this cooperation is successful, Faraday Future may be able to obtain support from the crypto world in the next few years.”
The funding comes at a time when it’s most needed. Faraday Future’s weeks-long dispute with its main investor Evergrande Health is pushing the company to it the edge of bankruptcy. More than 60 Chinese employees of Faraday Future say they have not received salaries in October. Meanwhile, the company is reportedly planning for layoffs and 20% pay cuts. Nick Sampson, Faraday Future (FF) co-founder and senior vice president of product strategy, has resigned amid layoffs.
The company finally obtained an emergency relief from the Hong Kong International Arbitration Center against Evergrand Health in late October. Faraday Future considered itself winning the battle because the relief allowed it to proceed with financing, although under stringent conditions. But Evergrande Health thinks otherwise.
The funding would gain the troubled company more time in mass-producing and commercializing its electric cars. Faraday Future has signed a contract earlier this month with US investment banking firm Stifel, Nicolaus & Co as it explores strategic options, including debt and equity financing.