Monday, December 6th, 2021

Faraday Future looking into claims of inaccurate disclosures


Faraday Future’s FF 91 prototype electric crossover vehicle is shown at a press event for CES 2017 at The Pavilions at Las Vegas Market on January 3, 2017 in Las Vegas.

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Pre-production electric vehicle company Faraday Future is delaying its third-quarter financial report in order to complete an investigation into “allegations of inaccurate disclosures,” the company said in a filing Monday.

The delay follows a J Capital Research equity research report in early October in which analysts accused Faraday Future of fabricating vehicle reservation numbers, one indication of demand for the company’s future cars. The report also accused Faraday Future of lying about its capability to start mass production of electric cars in in Hanford, California, within approximately seven months, among myriad other concerns.

Faraday Future, in a press statement Monday, reiterated plans to start deliveries of the company’s FF91 vehicles in July next year. The long-delayed fully electric crossover, which is supposed to include “driverless valet” and other high-tech features, was first unveiled at the Consumer Electronics Show in January 2017.

The company also said that it lost $280 million in the third quarter of 2021, even though its financial filing had to be delayed.

Founded in May 2014, Faraday Future went public via a special purpose acquisition company (SPAC) and private investment in public equity (PIPE) deal in July this year.

Former CEO Jia Yueting, filed for chapter 11 personal bankruptcy in the fourth quarter of 2019 and now serves as chief product and ecosystem officer at the company.

In the burgeoning EV industry, several smaller players have faced federal investigations after shortsellers accused them of fraud, including Lordstown Motors, Nikola and Workhorse group. Canoo also faced a federal investigation after a string of executive departures and high short interest.

By contrast, another EV newcomer, Rivian, notched a record-breaking IPO last week, and saw shares continue to rise by about 15% on Monday, amid news that President Biden was signing a bipartisan infrastructure bill set to pour $550 billion in government money into transportation, broadband and utilities, including $75 billion to help create a network of charging stations for EVs.

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