Another US EV company in trouble: Faraday Future to restate accounts

Faraday Future Intelligent Electric, a US electric vehicle developer, appointed a new financial chief and said it would restate financial statements for 2022 and the quarter ended March 2023 due to accounting errors.

The announcement comes after the company last month received $90 million in funding commitments from existing investors. Faraday Future has been struggling with a cash crunch and the company has been involved in a governance dispute with FF Top Holding, one of its largest shareholders. 

The news also highlights turmoil in the US electric vehicle ecosystem in general, where a price war by Tesla has pushed some EV companies to the limit of their financial ability. EV company Lucid responded by raising $3 billion from new and existing investors, including Saudi backers. 

Lordstown Motors filed for bankruptcy and is suing Foxconn for investments that it says were promised but never delivered. Foxconn says the agreement fell apart because Lordstown never achieved its agreed-upon targets.

In a statement, Faraday Future said the errors in its accounts related to changes in the fair value of debt issued by the company, noting that these concerns were non-cash and non-operating items. The company said the accounting restatement would not affect deliveries of its FF 91 2.0 car. 

Faraday Future had raised going-concern doubts last year, meaning its auditors worried about the company's ability to stay afloat. In the statement, it announced the appointment of Jonathan Maroko as new interim chief financial officer, taking over from Yun Han, who was named chief accounting officer.