The FF91 will be built in two locations: in Faraday's factory currently under construction in Hanford, California, and under contract by Korean manufacturer Myoung Shin. Credit: Handout.

You thought it was dead … very dead.

Jia Yueting’s troubled electric car startup, Faraday Future.

Well, guess what.

One hailed as the “Tesla killer,” Faraday Future is going to become a publicly traded company on the NASDAQ stock exchange and is raising around US$1 billion in the process.

Yes, really.

According to The Verge, the EV startup with a troubled past announced that it is indeed merging with special purpose acquisition corporation (or SPAC) Property Solutions.

About $230 million will come from the money that Property Solutions raised in its SPAC. The other $775 million will come from a new funding round happening concurrently with the merger.

Seriously, this is really happening.

More incredibly, Geely, China’s biggest privately owned automaker, is contributing “less than 10 percent” of that new investment, and $175 million is coming from an unnamed “Tier 1 Chinese City,” meaning that the Chinese government is involved in the deal, The Verge reported.

Faraday Future will have around $748 million of cash to play with when all is said and done.

With all this cash, Faraday Future expects to be able to finish building out its factory in Hanford, California with the new funds and launch its FF91 luxury SUV “within 12 months” of the finalization of the merger, which is expected to happen in the second quarter of this year, The Verge reported.

Smaller models, as well as a delivery vehicle, will follow. Faraday Future is targeting the US, China, and European markets and has an agreement with South Korean manufacturer Myoung Shin to make cars there.

A joint venture with Geely and the Tier 1 city is also being discussed.

Property Solutions CEO Jordan Vogel said in a call Thursday that his SPAC reviewed “roughly” 65 different companies to merge with, The Verge reported.

“Faraday Future is by far the most compelling company we’ve seen,” he said.

In a statement Friday, Faraday CEO Carsten Breitfeld said the deal will give the company sufficient funds to re-launch its FF91, a luxury battery-electric vehicle first shown in 2017 that has been positioned as a rival to Tesla’s upscale Model S and Model X. 

Inside sources say that Chinese automaker Geely is the anchor investor in the private placement. In addition, Faraday plans to set up a base in China and interface with Geely for contract manufacturing services, Gizmo China reported.

SPACs have been a very popular model for companies going public in recent times, partly because of little regulatory scrutiny and greater certainty about valuation, unlike a conventional IPO.

Early reviews of an FF91 production version highlighted facial recognition in every seat that enables personalized temperature and media settings; 11 screens including a 27-inch screen in the back seat that descends from the roof; and a “spa mode” where the seats massage passengers. Credit: Handout.

According to Investors Business Daily, the FF91 electric SUV touts 300-plus miles of range as well as high-end features, such as “zero gravity seats” and a cabin that’s a “third Internet living space,” for a reported $150,000-$200,000 sticker price.

Early reviews of a production version highlighted facial recognition in every seat that enables personalized temperature and media settings; 11 screens including a 27-inch screen in the back seat that descends from the roof; and a “spa mode” where lights dim and the fully reclined seats massage passengers.

While it’s just the latest EV startup to announce that it’s going public via SPAC in the last seven months (joining the likes of Nikola, Canoo, Fisker, Arrival, and others), Faraday Future is perhaps the most notorious considering its history of financial troubles, The Verge reported.

Going public has long been a goal for Faraday Future, which was founded in 2014 and started to emerge from stealth mode in 2015. But it’s a goal that’s seemed increasingly out of reach as the startup struggled over the years.

After debuting its electric luxury SUV, the FF91, at the 2017 Consumer Electronics Show, Faraday Future spiraled. It was facing a major cash crunch after already spending hundreds of millions of dollars of founder Jia Yueting’s own money, The Verge reported.

At the same time, Jia self-exiled himself to the US as he tried to escape massive mounting debts in his home country, China, following the collapse of his tech conglomerate LeEco.

Weeks away from running out of cash, Jia put everything on the line to sign a deal at the end of 2017 with Chinese real estate conglomerate Evergrande worth up to $2 billion in exchange for 45% of the company.

But when the relationship with Evergrande soured across that year as Jia quickly spent through the conglomerate’s first $800 million instalment. When Jia asked for more, Evergrande used the opportunity to try to sideline him, The Verge reported.

Ultimately, it wasn’t satisfied that Jia actually relinquished control, and the two sides started a months-long legal battle before an arbitrator in Hong Kong.

While this was happening, Faraday Future was down to just a few million dollars in the bank. It laid off hundreds and furloughed hundreds more, and cut salaries across the board, The Verge reported.

Faraday Future eventually reached a truce with Evergrande on the final day of 2018. The Chinese conglomerate was released from the remaining $1.2 billion and reduced its stake to 32%.

Faraday Future has been treading water ever since, staying alive by borrowing from an investment firm run by a “bankruptcy legend.”

Jia declared bankruptcy in late 2019 in an effort to settle some $3 billion of his own debts in China. 

The result of that process was that Jia put his controlling shares in Faraday Future in a trust of which his creditors now all own pieces, The Verge reported.

When the deal closes, shareholders of the SPAC will own 6.8% of the company.

The entities doing the $775 million raise will own 23%. Creditors that Faraday Future and Jia owe money to will own 17.2%. Existing shareholders in Faraday Future will collectively own 51.1%.

The combined company is expected to be listed on NASDAQ with the ticker “FFIE”, according to the joint statement by both companies.

Sources: The Verge, Gizmo China, The Motley Fool, Investors Business Daily