Faraday Future finds fusion partner for IPO

Faraday Future has found a partner for its IPO. After merging with investment company Property Solutions Acquisition, the new Faraday Future Inc. is to be traded on Nasdaq under the ticker symbol “FFIE”. The company has also signed a framework agreement with Geely.

First to the IPO: As the Californian electric car startup communicates, the transaction is expected to close in the second quarter of 2021. Property Solutions is already listed on the US stock exchange under the abbreviation “PSAC”. The IPO is expected to raise around one billion dollars.

In October, FF CEO Carsten Breitfeld had announced to Reuters that they were looking for a merger partner for the IPO. “We are working on such a deal and will hopefully be able to announce something soon,” Breitfeld had said at the time. He refused to name partners at the time.

In the current announcement, Breitfeld said, “This is an important milestone in our company’s transformation, one that we achieved with strong commitment from our employees, suppliers, and partners in the U.S. and China, as well as the city of Hanford, California. I am excited that this business combination will allow us to launch the class defining FF 91, building upon the founder’s original vision to help our users and shareholders take part in shaping the future of mobility.”

The FF 91 is expected to be launched within 12 months of the merger closing, and will later be joined by the FF 81 and FF 71 models, which are announced to launch in 2023 and 2024, respectively. Besides, Faraday Future plans to introduce a delivery vehicle for the “last mile” in 2023. Production occurs both at the factory in Hanford, California and cooperation with a “leading contract manufacturing partner in South Korea”. Faraday Future is also rumoured to be exploring the possibility of additional production capacity in China through a joint venture.

The latter is now apparently becoming more concrete, and probably brings Faraday Future Inc., a well-known investor: Faraday Future has also signed a framework agreement for cooperation with Geely. According to the agreement, the Chinese car company intends to acquire a minority stake in Faraday Future as part of the IPO and provide technical support to the Californian start-up. Besides, they are looking at a contract manufacturing of FF vehicles by the recently announced a joint venture of Geely and Foxconn.

The IPO route via a merger with an already listed investment company has become very fashionable in the eMobility industry in recent months. Budding electric truck manufacturer Nikola Motor, which has since come under investor criticism, had partnered with VectoIQ for an IPO. In August, Lordstown Motors (with DiamondPeak Holdings) and Canoo (with Hennessy Capital) announced similar deals. US charging company ChargePoint also wants to go public via a merger with Switchback Energy, and solid-state battery specialist and Volkswagen partner QuantumScape has entered into such an agreement with Kensington Capital.

The investment companies were usually set up for precisely this purpose and are also called “special-purchase acquisition companies” (SPACs). With such a SPAC deal, the otherwise usual procedures of an own IPO can be accelerated enormously in the case of a merger, since the SPAC is already listed on the stock exchange. In the USA, a classic IPO can take up to two years.

With reporting by Sebastian Schaal, Germany.

ff.com (stock market), ff.com, zgh.com (cooperation with Geely)