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Faraday Future, a young company out of electric car, has received another surprise lifeline, in the form of a new 50/50 partnership with China's online video game company The9, the company said on Sunday. EV. The9 is willing to contribute up to $ 600 million to the joint venture and Faraday Future has pledged to use the money to build a new car in China (and for the Chinese market) called V9.
The new car will be based on the FF91, the ultra-luxury electric SUV that Faraday Future debuted at CES 2017, and has spent the last few years fighting to get into production. The9 and Faraday Future say they will be able to manufacture 300,000 cars a year, although they have not shared the place where they would be built.
Faraday Future says the new joint venture will also help the start-up put the F9191 into production in 2019 in the United States. In his own publication, The9 announced that it would make an initial deposit of $ 5 million. Faraday Future said it would use to "overcome its short-term cash flow difficulties and support its ongoing equity financing efforts." The9 says the rest of its $ 600 The promise of a million is "contingent upon the satisfaction of funding conditions", although these conditions are unclear.
The news arrives a few days after The edge reported that Faraday Future had sold its head office in Los Angeles in order to generate cash in the short term, and a few weeks after start-up, it was necessary to tell employees on leave without pay that they could not return all of after.
The9 is listed on the Nasdaq Stock Exchange and has a market capitalization of approximately $ 100 million. According to a 2018 press release, it is "one of the first companies to create a virtual community in China." The9 was born by launching an online community called "Ninth City" in 1999, in which people used virtual currency to "conduct online social activities and exchanges such as games, reading, music, etc. . ". Exclusive license to operate World of Warcraft in China, although she lost this asset in 2009. Better known as game development company, The9 recently adopted blockchain technology.
Founded in 2014, Faraday Future has a reputation as a secret startup that has attracted many talents such as Apple, Tesla and most traditional builders. The start-up has found itself on the verge of financial insolvency in late 2017, largely because of the high cost of designing and manufacturing a car, but also of mismanagement founder and CEO, Jia Yueting.
Jia took control of the company in 2017 after being self-exiled to the United States in order to escape the collapse of its other company, LeEco, China. Jia and LeEco (and the myriad of related companies born in and around it) are still looking for hundreds of millions of dollars in China, which has put them on a blacklist of domestic debtors.
Faraday Future was saved at the end of 2017 by the Chinese real estate conglomerate Evergrande, who promised $ 2 billion to the startup. But relations between Evergrande and Faraday Future eventually deteriorated in 2018. Faraday Future spent the first installment of this investment earlier than expected and, when Jia asked for an advance on the rest of the money, the two parties ventured into a fierce battle for the control of the start-up of VE which eventually led to hundreds of layoffs, leaving many leaders and the last co-founder of Jia, and a delay of the FF91.
Evergrande and Faraday Future finally agreed to restructure the deal by the end of 2018, allowing the EV startup to look for new financing to launch its car. But Faraday Future has had a hard time reaching an agreement in recent months. In the meantime, hundreds of employees remained on unpaid leave, while others went to work in competing companies.
Faraday Future now faces the difficult task of recruiting talent to fill these positions, many of which play a crucial role. For example, the company recently lost many of the company's powertrain development companies instead of rivaling EV, Rivian.
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