Faraday Future said Wednesday during an investor presentation that it plans to open a factory in China as early as 2025, even as it faces a shortage of capital and an SEC investigation.
The electric vehicle maker said it is scouting locations for a site to build its future vehicles and serve as a local headquarters for the Chinese market, according to an SEC filing Wednesday. While Faraday previously mentioned plans to expand into China, this is the first time the company has provided a few crumbs of detail.
Faraday’s announcement comes as China flourishes as a key market for EV manufacturers, but at a precarious time for the troubled EV maker.
Expanding into China may sound overly ambitious given the company’s struggle to launch its long-delayed first model, the 1,050-horsepower FF 91, while burning through cash with little near-term prospect for generating revenue. Yueting Jia, the company’s Chinese founder who was forced to step down as CEO in April, has limited powers in China since refusing to return to the country to face financial fraud charges.
CEO Carsten Breitfeld warned in May that the company was running out of money. He also said, at the time, that the company plans to deliver the first FF 91s to customers in the third quarter of 2022. Its 1.1 million-square-foot factory in Hanford, California, is scheduled to open in July and will eventually ramp up to produce 10,000 vehicles annually, he added.
According to the SEC filing, Faraday has about 90% of the equipment it needs to build the car, which features facial-recognition technology, three 5G modems and nearly a dozen screens.
Meanwhile, it narrowly avoided a Nasdaq delisting in May by filing its overdue 2021 annual report and 2022 first-quarter financial results. Still, the results showed widening losses and a lack of funds to build its second vehicle, the FF 81 sedan designed for the mass market.
The location in China will build the FF 81 as well as the company’s third model, the FF 71 smart last-mile delivery vehicle.
A presence in China will help the company cut costs, lead times and supply chain complexities, as well as build and customize vehicles rapidly for the local market, according to Faraday. The company said in the filing that “deep cultural roots in both U.S. and China provide a competitive advantage across two of the largest EV markets.”
The company also announced in February an agreement with South Korean manufacturer Myoung Shin to build the FF 81 in a former GM plant in Gunsan, South Korea, starting 2024.
Faraday Future was not immediately available for comment late Wednesday.