Faraday Future has agreed to go public through a merger with special-purpose acquisition company Property Solutions Acquisition Corp., reigniting hopes that the electric-vehicle startup will be able to bring its premium car to production after a long delay.
The deal values the combined company at around $3.4 billion and is expected to generate gross proceeds of more than $1 billion, according to a statement Thursday confirming an earlier Bloomberg News report. The transaction is scheduled to close in the second quarter.
Property Solutions shares closed Thursday's trading up 19 percent to $15.43.
Investor interest in EVs has surged in the midst of Tesla Inc.’s booming share price and optimism that Biden Administration policies will help spur demand. Faraday is the latest in a string of EV makers going public via a special-purpose acquisition company, following Nikola Corp., Fisker Inc. and others. Electric, autonomous or connected car-related companies raised more than $12 billion through SPAC listings or initial public offerings last year, according to BloombergNEF.
Los Angeles-based Faraday was founded by Jia Yueting, an entrepreneur who filed for bankruptcy in 2019 after running up billions of dollars in personal debt. While Jia has settled with creditors, the financial challenges stymied the company’s ability to raise funds and forced it to put production on hold.
Faraday CEO Carsten Breitfeld said production will start at a plant in Hanford, Calif., within 12 months of the transaction closing.
“Faraday is not a startup,” Breitfeld said in an interview. “We have already invested closed to $2 billion in technology. We are close to production.”
Faraday also reached an agreement with a contract manufacturer in Korea to boost its capacity and has a framework agreement for a joint venture for additional manufacturing capacity in China, he said. The company has about 100 employees there and roughly 200 staff in the U.S.
Property Solutions, led by Chairman and co-CEO Jordan Vogel, raised $230 million in a July IPO. Any past issues with the company and founder have been resolved, Vogel said.
“There are no skeletons in the closet,” he said. “We have spent an exorbitant amount of time examining the history.”
Faraday, which has 14,000 reservations for its FF91, says the car will have three motors and the ability to go more than 350 miles on a single charge. Faraday hasn’t announced a price but executives have previously said it will be around $150,000. The company is initially targeting the luxury market and planning lower-priced models later.