Faraday Future is reportedly struggling to raise $500 million ahead of a major deadline

Faraday Future

Faraday Future has more than $400 million in debt that will come due in December if it fails to raise half a billion dollars in a Series A round.
The electric-car startup has been scrambling for cash since at least the beginning of 2017.
So far this year, Faraday has scrapped plans to build factories in North Las Vegas and the San Francisco Bay Area, and lost scores of top talent, including its recently hired COO/CFO Stefan Krause.
The company owes millions of dollars in unpaid bills.

Faraday Future is said to be running up against a December deadline to raise $500 million in what has so far been an unsuccessful Series A round.

According to a Bloomberg report published Monday night, Faraday will be on the hook for a $400 million convertible note plus 12% interest if it can't raise half a billion dollars by next month. Faraday needs the money to pay off Chinese investors who financed the debt, according to unnamed sources cited by Bloomberg.

The flailing electric-car startup has been trying to raise more money since at least the beginning of 2017. Business Insider reported in July remarks from company insiders who said at the time that Faraday was "in a precarious situation" as it grappled with some of the same problems that linger at the company today.

Faraday owes millions of dollars in unpaid bills and is facing lawsuits from some of its suppliers. The company has also suffered an exodus of top talent, including the recently hired COO/CFO Stefan Krause, who quit the company last month.

Krause had been spearheading a $1 billion fundraise for Faraday over the summer. The venture had taken him on a worldwide blitz to the Middle East, London, Germany, China, and back to the US to speak with roughly 35 investors — mostly private individuals — to fund a two-year plan designed to get Faraday's North Las Vegas factory off the ground and move its concept car, the FF91, closer to production.

The lack funding forced Faraday to shelve the massive factory project in North Las Vegas. The company later said it signed an agreement to lease property about 40 miles south of Fresno, California.

People familiar with the fundraising effort told Business Insider this month that Faraday's difficulty raising $1 billion for its Series A was partially due to investor anxiety over Faraday's primary backer, Jia Yueting, and his control of the company. A Chinese court froze millions of dollars in assets belonging to Jia earlier this year because of past-due loans linked to one of his businesses there.

Jia has been unwilling to relinquish control of Faraday Future, Business Insider's sources have said. Bloomberg's report seemed to confirm this, noting that Jia rejected a bankruptcy plan drawn up by Krause before Krause left the company, and scrapped other solutions that would lead to him being pushed out of his company.

Faraday has insisted that the bankruptcy documents, which had been floating around online, were "faked."

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