Faraday Future, the company also considered by some to be the “Tesla killer,” has been dragged into a Los Angeles court by the Mill Group, a visual effects company. In the complaint filed earlier this month, the company accused the electric car maker of failing to pay $1.8 million.
Faraday defaults on one more payment
On Monday, Jalopnik published legal documents pertaining to the case, which said that Faraday hired the Mill Group last summer to create a visual presentation to promote the January launch of a new electric vehicle that the EV maker developed. Faraday agreed to make total payments of $1.86 million to the Mill Group beginning in September and the final payment by October.
“Faraday has repeatedly acknowledged that it accepts the sums owing to The Mill and its intention to pay,” the complaint says. “However, despite repeated requests for payment and promises by Faraday to pay, funds have not been received. Instead, Faraday has only paid $20,000.00 to the Mill, leaving a total outstanding balance in the amount of $1,802,750.00.”
The product was delivered to Faraday, claimed the Mill. There have been several other lawsuits against Faraday Future from unpaid vendors as well. The intensely private startup has been facing a cash crunch for quite some time, and its executives too are quitting.
Faraday Future in financial turmoil
Faraday Future is in turmoil, according to eight current and former Faraday executives to whom Business Insider spoke recently. A source with knowledge of Faraday’s affairs told BI that the company needs to beef up its pocketbook, and failure to do so will result in suppliers forcing it into bankruptcy.
Engadget reported in December that it was important for the company to secure funding at CES, or it would be at risk of going out of business by February. The company has received more than 64,124 reservation slots for its FF 91 SUV. A priority reservation can be secured for $5,000, but how many people paid for one isn’t known as of now.
The company offered free reservations as well, but if the pre-order amount would have been $5,000, the company would’ve had over $320 million. Production on the FF 91 is scheduled to start in 2018.
As of now, there have been no comments from Faraday Future on the lawsuit.