Debt-ridden electric vehicle maker Faraday Future loses Zhuhai government as a crucial investor ahead of US listing

The government of Zhuhai had to pull its US$175 million investment as part of a private placement in a SPAC because of Beijing’s strict forex regulations

Although the shortfall was made up by other investors, it is still likely to be a blow to the indebted carmaker’s expansion plans

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The Faraday Future FF91 electric car is unveiled at the 2017 Consumer Electronics Show (CES) in Las Vegas. Photo: Bloomberg

Published: 7:09pm, 22 Jul 2021Updated: 7:08pm, 22 Jul 2021

Electric vehicle (EV) company Faraday Future failed to secure a crucial government investor ahead of its public listing in the United States, potentially crimping the debt-ridden carmaker’s expansion plans.

The government of Zhuhai – which hopes to lure Faraday to set up a base in the city – has had to pull its US$175 million investment as part of a private placement in a special purpose acquisition company (SPAC), sources confirmed on Thursday.

The local government investment was pulled at the last minute because of Beijing’s strict foreign-exchange regulations, but made up by other investors in the blank-cheque company, which agreed to acquire Faraday in January and take it public on Nasdaq.

According to Chinese financial magazine Caixin, the EV start-up badly wanted the local government as a shareholder – behind the invested cash – because it has clout when it comes to things like land allocation, fundraising and sales promotions.

Faraday, formerly controlled by the fallen Chinese tycoon Jia Yueting, received US$1 billion from some 30 investors in China, the United States and Europe in a SPAC deal that could provide it much needed capital and support production of the FF91. The luxury car was first unveiled by the company in 2017 and is not expected to begin production until next summer.

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Debt-ridden electric vehicle maker Faraday Future loses Zhuhai government as a crucial investor ahead of US listing

The government of Zhuhai had to pull its US$175 million investment as part of a private placement in a SPAC because of Beijing’s strict forex regulations Although the shortfall was made up by other investors, it is still likely to be a blow to the indebted carmaker’s expansion plans

The government of Zhuhai had to pull its US$175 million investment as part of a private placement in a SPAC because of Beijing’s strict forex regulations

Although the shortfall was made up by other investors, it is still likely to be a blow to the indebted carmaker’s expansion plans