Electric vehicle startup Faraday Future has demoted its founder, Yueting “YT” Jia, who is no longer an executive officer at the company.
In an SEC filing this week, Faraday Future said Jia will continue in his role as “chief product and user ecosystem officer,” which sees him focus on the automaker’s “product and mobility ecosystem,” as well as its “internet, artificial intelligence and advanced R&D technology.” Jia was previously the firm’s CEO, but stepped down in September 2019 and was succeeded by former BMW executive Carsten Breitfeld.
The shakeup comes as Gardena-based Faraday deals with an SEC investigation into whether it misled investors with inaccurate statements. The scandal has already prompted an internal review that resulted in the company revamping its board and handing a 25% pay cut to both Jia and Breitfeld.
Faraday Future founder YT Jia.
Image from Faraday Future
A spokesperson for Faraday confirmed Jia’s demotion, describing it as “a remedial step recommended by the [board’s] special committee as a result of the findings of the [internal] investigation.”
Jia has been a controversial figure since founding Faraday in 2014. The Chinese businessman filed for Chapter 11 bankruptcy in 2019 to address $3.6 billion in personal debts, much of it tied to the financial challenges of his China-based tech conglomerate, LeEco. Jia’s stewardship of Faraday faced blistering criticism in a report last year by short-selling firm J Capital, which labeled the founder a “securities fraudster” and described Faraday as an “embezzlement vehicle.” The J Capital report led to Faraday launching its internal investigation, as well as subsequent investor lawsuits and the SEC’s scrutiny.
Faraday went public last July via a SPAC merger that raised approximately $1 billion for the company and valued it at $3.4 billion—though that valuation has fallen significantly, in line with the company’s stock price. As well as legal problems, the automaker has faced myriad financial and production issues in recent years, but said earlier this month that it plans to launch its first electric vehicle, the FF91, in the third quarter of this year.
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