Carsten Breitfeld, the man who ran the BMW i program and brought the i8 supercar into the world, is taking over as CEO of troubled EV startup Faraday Future, the company announced on Tuesday. Jia Yueting, Faraday Future’s founder, has resigned the CEO role and will become the company’s “chief product and user officer.” Faraday Future is also seeking a new “global chairman” to help the company move forward.
Breitfeld also helped found Chinese EV startup Byton and most recently served as the CEO of another Chinese EV company known as Iconiq Motors. “I am thrilled to accept the role of CEO and look forward to powering FF to its next stage of success,” said Breitfeld in a statement. “One of the main reasons I joined FF was YT and his vision for how the mobility eco-system will transform the industry, and FF’s industry-leading products and technology, as well as their recently-implemented global partnership program.
Breitfeld also said he and Jia had discussed bringing him over to the company in the past. “I appreciate his entrepreneurial spirit and admire his vision of successfully predicting the future mobility ecosystem,” he said. “Being an entrepreneur myself, I feel that I am in a better position to understand his unremitting efforts and contributions in pursuing his dream.”
Founded in 2014, Faraday Future was, at one point, the most-hyped EV startup out of a handful that tried to follow in Tesla’s wake. It had hired nearly 1,500 workers away from the likes of Tesla, Apple, and the world’s biggest automakers in an attempt to produce a luxury electric SUV called the FF91. But the company is now in the midst of a serious restructuring effort that’s being run by a man described to The Verge as a “bankruptcy legend.”
The startup has barely survived two serious brushes with financial death in the last two years. As money got tight in 2017 due to alleged financial mismanagement, the company abandoned a grand plan to build a $1 billion factory in the Nevada desert, dropped its budding motorsports division, and lost a number of key executives. Faraday Future brought in former BMW executive Stefan Krause to serve as chief financial officer and help steer the company out of trouble, but Jia — who had not yet assumed the CEO role but was managing the company regardless — refused his solutions, multiple former employees told The Verge at the time.
Krause and another fellow BMW executive resigned in late 2017, and Faraday Future was on the brink of financial insolvency until an 11th-hour $2 billion investment saved the company at the end of 2017. Jia named himself CEO, and Faraday Future headed into 2018 with the goal of producing the FF91 by the end of the year.
It was eventually revealed that the new money was coming from Evergrande, a massive Chinese real estate conglomerate. But before Faraday Future could get the FF91 into production, Evergrande revealed that Jia had spent the entire first installment ($800 million) of the investment ahead of schedule.
Court documents show Jia asked Evergrande to advance some of the remaining investment, and that Evergrande initially agreed, but only on the condition that the CEO distance himself from the company.
The two sides spent the last few months of 2018 arguing in various international courts over whether Jia properly acquiesced to Evergrande’s terms and whether Evergrande breached the investment agreement by withholding the rest of the money.
In the meantime, Faraday Future had just a few million dollars in the bank. As a result, in October 2018, the startup laid off hundreds of employees and cut salaries across the board. More executives resigned, including one of the company’s three co-founders, Nick Sampson, who said in a letter to employees that Faraday Future was “effectively insolvent.”
“I cannot continue knowing the devestating impact we are having on the lives of our employees, their families and loved ones as we as the ripple effect this will have on lives throughout our suppliers and the industry as a whole,” Sampson wrote at the time.
Faraday Future continued to put hundreds more employees on unpaid leave up until the end of 2018. It eventually settled the clash with Evergrande, which reduced its stake in the startup, and it has since gone on to build up its own budding EV empire in China. As it started to search for new investors, Faraday Future had to sell its own Los Angeles headquarters to generate short-term cash, and it has also tried to sell the land it owns in Nevada where it once planned to build the $1 billion factory. The company is now down to just a few hundred employees.
Faraday Future is still hundreds of millions of dollars short of being able to get the FF91 into production. The startup recently signed a deal with a Chinese mobile gaming company to produce electric minivans in China, though the timetable of that deal (and any potential investment resulting from it) has already slipped.
A separate deal with Chicago financial firm Birch Lake Partners has led to the restructuring that is currently underway. Faraday Future has said the restructuring effort will include an effort by Jia to repay his massive debts in China, where both he and his failed tech conglomerate LeEco owe millions of dollars to a long list of creditors.
“In addition, [Jia] is officially establishing a debt repayment trust to provide a thorough solution of his remaining debts and has made it a priority to repay them as quickly as he can,” the company said in a statement on Tuesday.
“I gave up everything to make sure FF will succeed, and to fully repay my remaining guarantor debt as soon as possible, and ultimately to realize the dream of revolutionizing the automotive industry,” Jia added.
Jia may leverage his ownership of Faraday Future to repay some of those debts, according to a recent report in Chinese news outlet Yicai Global. But that may not be easy. One of Jia and LeEco’s Chinese creditors recently won a court case against him in California. Jia has so far refused to pay the nearly $20 million debt, and late last week, the creditor’s lawyers were able to convince the court to once again freeze the Faraday Future founder’s ownership stake.
Jia has appealed the ruling to the Ninth Circuit, but is also scheduled to appear in court later this month to explain why he has not yet complied with the judgement. Last week, his high-powered attorneys (from the law firm Latham & Watkins) dropped out of both cases, leaving Jia to represent himself until he’s able to find new representation.