Electric carmaker Faraday Future gets opportunity to rebuild after settling dispute with main investor Evergrande

Embattled electric car start-up Faraday Future is free to conduct debt and equity financing after it settled a dispute with mainland China property conglomerate Evergrande Group, a key investor, on Monday.

Evergrande said it had agreed to restructure its pledged US$2 billion investment in the Los Angeles, California-based carmaker, which is controlled by Chinese entrepreneur Jia Yueting, ending a months-long dispute. Both sides have also agreed to drop all allegations against each other.

Evergrande Health jumps 10 per cent after arbitration calls for truce in war with electric car maker Faraday Future

Faraday had targeted December 2018 for the production of the FF91, a luxury electric sport-utility vehicle model, and planned to deliver the first batch in the first quarter this year.

“Cash is crucial for electric car start-ups,” said Yin Ran, a Shanghai-based investor involved in bond and private equity investments. “It is good news for Faraday, as it now has new opportunities to raise fresh funds after the settlement of its dispute.”

According to US technology news network The Verge, Faraday has started discussions with several potential investors about financing. The cash-strapped carmaker faces an uphill task, as it owes big amounts of money to suppliers, according to analysts.

At the end of 2017, Evergrande, which is controlled by mainland China tycoon Hui Ka-yan, said it would invest US$2 billion in Faraday over three years for a 45 per cent stake, bailing out the ailing carmaker. But the two companies have been embroiled in a series of disputes over the past several months.