Faraday Future to furlough additional employees due to severe cash flow difficulty

Shanghai (gasgoo)- EV startup Faraday Future (FF) announced on December 4 that it plans to furlough more employees due to its severe cash flow issues caused by the ongoing spat with its major investor Evergrande Health.

“FF's recent financial crisis was brought about by investor Evergrande Health refusing to make its scheduled payments,” the startup said on its Twitter, “the investor has further breached its contractual obligations to FF and refused to release its liens over FF's assets as it was required to do. This has resulted in making it more difficult for FF to achieve short-term financing through asset-backed loans resulting in the current temporary cash flow difficulties.”

Moreover, FF stated that it is filing a new emergency relief application on the main arbitral tribunal soon. Since the ruling may be delayed by two or three months, the company's very tight cash flow will still continue, thus it must take further cost-reduction measures to cope with the existing finacial situation which includes putting more employees on furlough beginning this week. This measure will involve over 1,000 global employees, including hundreds of employees in the U.S. who are willing to stay and continue to work on the FF91 production and delivery as well as those who will be on a temporary furlough.

Meanwhile, FF said it has made a substantial progress on equity financing supported by investors from around the world and hopes to solve the funding issue in 2-3 months.