Faraday Future is trying to cancel a $2 billion investment as it reportedly struggles to pay suppliers

Faraday FutureFaraday Future’s planned FF91 SUV.
  • The electric-vehicle startup Faraday Future is attempting to cancel a $US2 billion deal that would give a 45% ownership stake to the Chinese healthcare company Evergrande Health Industry Group, according to a filing on the Hong Kong stock exchange first reported by Reuters.
  • The filing says Faraday asked for a $US700 million advance from Evergrande and entered into arbitration to cancel all its agreements with Evergrande after claiming it had not received the payment.
  • Evergrande said in the filing that Faraday had not met the terms necessary to receive the funding. Faraday said in a statement that it had.
  • Faraday has struggled to build its planned FF91 electric SUV amid financial concerns.

The electric-vehicle startup Faraday Future is attempting to cancel a $US2 billion deal that would give a 45% ownership stake to the Chinese healthcare company Evergrande Health Industry Group, according to a filing on the Hong Kong stock exchange first reported by Reuters.

Faraday’s desire to end the deal comes as it struggles to pay vendors and suppliers after spending the first $US800 million Evergrande had planned to invest in it, according to The Verge.

“Under the leadership of FF founder and CEO YT Jia, FF remains positioned to lead the industry in delivering a disruptive and revolutionary vehicle in 2019,” a Faraday Future representative told Business Insider in a statement that was also posted to the company’s Twitter account on Monday. “We will continue to take decisive action, including pursuing funding opportunities from those who share our vision, to ensure that our vision is realised.”

Evergrande’s filing says Faraday asked for a $US700 million advance on the remaining $US1.2 billion of Evergrande’s planned investment and entered into arbitration to cancel all its agreements with Evergrande after claiming it had not received the payment. Evergrande said in the filing that Faraday had not met the terms necessary to receive the funding.

In its statement from Monday, Faraday said it had met the required conditions to receive the advance payment and was attempting to terminate its deal with Evergrande as a result of Evergrande’s failure to provide the promised funding. Faraday also alleged that Evergrande has prevented it from receiving funding from other sources.

Faraday also denied the claim in Evergrande’s filing that Faraday’s founder and CEO, Jia Yueting, manipulated Evergrande’s board of directors to secure the agreement for the advance payment.

The automaker, founded in 2014, has struggled to build its planned FF91 electric SUV amid financial concerns. Faraday has faced lawsuits and liens from suppliers who claim they have not been paid, and the first pre-production version of the FF91 caught fire hours after it was shown to employees and their families, according to The Verge.

Yueting, who’s also the founder and chairman of the Chinese tech company LeEco, last year had $US182 million in assets frozen by the Chinese government because of unfulfilled loan payments.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.