Faraday Future paid $7.5 million to a company connected to founder Jia Yueting while facing SEC investigation. The electric vehicle startup made these payments during a four-year probe that closed in March.
Jia founded Faraday Future in 2014 after leaving Chinese tech giant LeEco, where he accumulated massive debts. The startup burned through funding trying to compete with Tesla but repeatedly delayed vehicle launches and faced cash shortages.
The payments raise questions about corporate governance and related-party transactions at the struggling EV maker. Faraday Future has cycled through multiple ownership structures and near-bankruptcy situations since its inception.
The SEC investigation ultimately closed without enforcement action. However, the payments highlight the challenges facing capital-intensive EV startups. Building vehicles requires billions in sustained funding. Faraday Future has lost investors billions while delivering few cars to customers.
The company's path contrasts sharply with Tesla's execution. Where Tesla ramped production at scale, Faraday Future remained perpetually pre-revenue. Jia's previous failures at LeEco cast doubt on the company's leadership from day one.
These payments to Jia-linked entities during an SEC probe suggest weak internal controls and potential conflicts of interest that likely accelerated investor skepticism about the venture.