Ailing EV maker Faraday Future co-founder Nick Sampson quits

(Reuters) – Faraday Future co-founder Nick Sampson has quit his executive post at the Chinese electric vehicle developer, the latest blow to the troubled company that said it was experiencing “extraordinary financial hardship.”

FILE PHOTO: Nick Sampson, senior vice president of product R&D and engineering at Faraday Future, speaks during an unveiling event for the Faraday Future FF 91 electric car in Las Vegas, Nevada January 3, 2017. REUTERS/Steve Marcus

Sampson was senior vice president for product strategy and is the second of three co-founders to resign in just over a year, leaving only Chief Executive Jia Yueting.

His exit announced on Tuesday comes as Faraday is embroiled in a bitter legal fight with its largest shareholder, China’s Evergrande Health Industry Group Ltd, following a planned $2 billion investment that went sour.

The company’s problems underscore the challenges that EV manufacturers face in bringing problem-free cars to market – a feat even Tesla, the biggest U.S. automaker by market value, has struggled to do.

Faraday Future (FF) has placed some employees on unpaid leave through December and offered others the option of taking leave for the same period of time, the company told Reuters in an emailed statement.

This move comes days after Faraday said it was planning layoffs and salary cuts.

The company said Peter Savagian, its senior vice president for global product and technology, had stepped down as well.

“Recent actions taken by Evergrande is causing FF to experience extraordinary financial hardship,” Faraday said.

“The investor has intervened in the company’s capital planning and is preventing FF from utilizing our assets, which requires FF to take some very difficult yet necessary actions,” it added.

Evergrande Health, a unit of property giant China Evergrande Group, owns 45 percent of Faraday. Evergrande Health was not immediately available for comment.

Faraday is free to seek financing from sources other than Evergrande Health, according to an interim ruling earlier this month by a Hong Kong arbitration court.

But the ruling comes with stringent conditions and gives Evergrande Health preferential rights to any new share issue by Faraday.

Faraday, which began in 2014, lost another co-founder Tony Nie in October last year.

Jia, Faraday’s CEO, is best known for starting the tech conglomerate LeEco, which is struggling with high debts after expanding too quickly.

Faraday, which posted a net loss of $340 million last year, said last month that a preproduction model of its first vehicle, the FF 91, was presented to employees on Aug. 29 ahead of schedule.

Reporting by Vibhuti Sharma in Bengaluru and Yilei Sun in Beijing; Writing by Sayantani Ghosh; Editing by Shounak Dasgupta and Darren Schuettler

Our Standards:The Thomson Reuters Trust Principles.

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