EV Startup Faraday Future Considers SPAC Route To Go Public: Report

California-based electric vehicle startup Faraday&Future Inc is considering going public through a reverse merger with a blank check company, according to Reuters. CEO Carsten Breitfeld didn't disclose the specifics of the deal.

What Happened: The company expects to generate $800 million to $850 million to launch FF 91 — its first electric sports utility vehicle. Once funded, Faraday intends to deliver the SUV in nine months and kick off volume production in 12 months.

Initial productions would take place in California, but later on, will be contracted to a manufacturer in Asia, Reuters reported.

Faraday has raised approximately $2.3 billion since its inception by way of debt financing and equity financing. In June 2018, Evergrande Health Industry Group Limited assumed ownership of 45% equity in Faraday, which further attracted a $2 billion investment from Season Smart Limited in 2017. Faraday further received $225 million by way of debt financing in April last year.

Why Does It Matter: The EV startup has burned through $2 billion, and the employees hold almost half of the company’s stake through an executive partnership, according to Reuters.

Faraday was founded by a Chinese businessman, Jia Yueting who filed for bankruptcy in October 2019.

Routing public offerings through a special purpose acquisition company (SPAC) is becoming increasingly popular, especially among technology startups. Romeo Power -  a commercial EV battery maker, announced a deal with SPAC RMG Acquisition Group RMG on Monday, for a $384 million public offering.

In July, EV maker Nikola Corporation NKLA raised $525 million through a reverse merger with VectorIQ Acquisition Corp.

Another EV company, Fisker Inc. is expected to go public later this month through a merger with SPAC Spartan Energy Acquisition Corp SPAQ.

Photo courtesy: Faraday & Future Inc