The Torquest - Your Daily Auto Fix
Business news from the world of legacy automakers, electric vehicle startups, suppliers and everything in between and beyond.
What’s Inside: *Lordstown Motors. Nikola. Is another EV storm brewing? * Elon Musk says Tesla HQ moving to Texas from California*
October 8, 2021. Issue #27
1. Is There A New EV Scam In Town? Short-seller J Capital Research Thinks So
Pre-production electric vehicle startup Faraday Future is in the news for all the wrong reasons.
Activist short-seller firm J Capital Research has alleged in a detailed report that the recently listed company that picked $1 billion from investors is a scam and that it will never sell a car.
The short-seller has alleged that just like other electric vehicle frauds — Lordstown Motors and Nikola —, China-based Faraday Future too has “invented” most of its bookings and failed to deliver a single car.
Anne Stevenson-Yang, co-founder, J Capital Research alleges the startup is nothing but “a bucket to collect money from U.S. investors and pour it into the black hole of debt” created by China's best-known securities fraudster, Jia Yuetin.
The billionaire-founder Yueting has in the past been involved in several financial controversies related to his companies. Yueting became the CEO of Faraday Future in 2017 and moved to California.
He sold a majority stake of the startup to a subsidiary of Evergrande Group — the Chinese real estate company currently mired in financial red flags. The two companies later reached a financial settlement after Yueting sued Evergrande.
“We expect Evergrande, which owns 20.5% of this company and stands to gain more equity, to sell off its shares as soon as the lockup period ends, in January 2022 if not, quietly, before that,” the short seller said.
Faraday Future’s filings reveal it expects to need an additional $1.4 billion in funding by 2024 to achieve its financial targets, as per the report.
The report alleges Faraday Future has gone back on its promises to build factories in five localities in the U.S. and China and repeatedly delayed the sixth as well.
Faraday Future has in the past week made two key announcements. First, a partnership with DRӒXLMAIER for luxury interiors. And an inside look at the fully automated system that will manufacture the electric, autonomous FF 91’s lightweight aluminum closures.
Faraday Future shares are down 6.43% at $7.86 a share in early trading on Friday.
2. It's Finally Official! Elon Musk Says Tesla Is Moving HQ To Texas From California
Tesla Inc’s annual shareholder meet did not have any big surprises but the event managed to keep investors hooked with updates across the board including an official confirmation related to its new headquarter.
The annual event was being broadcast live from Tesla’s Austin, Texas, Giga facility, which the company’s CEO Elon Musk said would be its new headquarters.
The move replaces Fremont, California, which served as the company’s official home for nearly two decades. Musk said he hoped to ramp up production at Freemont by 50% in the coming years.
Musk was also quick to address the elephant in the room — the global semiconductor shortage. The event comes in quick succession after Tesla’s recent blockbuster third quarter deliveries.
“Basically, if we can get the chips we can do it," Musk said, adding that the chip shortage will alleviate soon and he hopes to maintain the delivery rate.
Musk revealed the hotly anticipated Cybertruk electric SUV will enter production next year and reach volume production in 2023.
Tesla’s Cybertruck will be built at Giga Austin.
Tesla might start scouting for locations for another factory next year. Musk said “the idea is to have high volume cars made where the customers are.”
Tesla shares are down 1% at $787.25 in early trading on Friday.