Is Jia Yueting, who just raised 700 million yuan, about to be "arrested" again?
Jia Yueting seems to have a dual script of "ice and fire".
On one hand, Faraday Future has just received a fresh financing of $105 million and declared its intention to bet on luxury pure - electric MPVs, AI autonomous driving, and dual - line expansion in China and the United States. On the other hand, the Sword of Damocles of a three - year fraud investigation by the U.S. SEC hangs over its head.
Recently, Faraday Future (FF) announced the completion of a $105 million financing. This is a new round of capital injection following the $61 million financing in the first quarter. This financing will be used to promote the mass production of the new FX model, AI technology R & D, and market expansion, and is regarded as a key measure for Jia Yueting to reverse FF's operating difficulties. However, along with the news of the new round of financing comes the progress of the SEC's investigation. The U.S. Securities and Exchange Commission (SEC) has sent letters to FF founder Jia Yueting and President Wang Jiawei, warning them that they may soon face law - enforcement actions from the agency due to a three - year fraud investigation.
Jia Yueting is once again pushed to the forefront of the storm.
Another Round of Financing
When it comes to financing, one has to admit that Jia Yueting is truly remarkable.
Recently, he raised another $105 million (approximately RMB 750 million).
Faraday Future (FF) recently announced the completion of a $105 million financing. This is a new round of capital injection following the $61 million financing in the first quarter. This financing will be used to promote the mass production of the new FX model, AI technology R & D, and market expansion, and is regarded as a key measure for Jia Yueting to reverse FF's operating difficulties.
It is reported that the $105 million financing will be injected into FF's operating system in stages. 60% of the funds are intended to repay historical debts to suppliers, and the remaining part will be mainly invested in three areas: Preparation for the mass production of the FX model: Support the production line debugging and component procurement of the first model, Super One, of the sub - brand Faraday X. This model is positioned as a luxury pure - electric MPV and is planned to make its global debut in June 2025; R & D of AI technology: Upgrade the in - vehicle intelligent system, especially the real - scene testing and algorithm optimization of the autonomous driving module; Market development in China and the United States: Simultaneously promote the construction of the local delivery network in the United States and the establishment plan of a subsidiary in Macau, China. The latter has entered the substantial preparation stage.
It is worth noting that FF founder Jia Yueting promised to use his full $1.2 million CEO bonus to increase his holdings of the company's shares on the secondary market and lock them in for at least one year to convey the confidence of the management.
In 2014, Jia Yueting embarked on his dream of building cars and founded Faraday Future.
As one of the pioneers in the electric vehicle industry, Faraday Future aims to build high - performance and environmentally friendly electric vehicles.
Since its establishment, Faraday Future has never stopped financing.
It is reported that in the early stage of its development, in order to raise funds, the company adopted various methods, including raising funds from investors, seeking government subsidies, and cooperating with partners. Eventually, Faraday Future successfully attracted some well - known investors. Among them, Jia Yueting personally invested hundreds of millions of dollars in Faraday Future.
In March 2015, the company completed its Series A financing, and the specific amount was not disclosed. In March of the following year, Faraday Future completed its Series B financing, with the financing amount exceeding $1.5 billion. In January 2017, at the CES exhibition, Faraday Future first showcased the FF91 concept car and announced a cooperation agreement with Evergrande Group, which invested $600 million. In July 2019, Faraday Future underwent a restructuring and reached a new financing agreement with investors such as Birch Lake Associates. In September 2020, Faraday Future announced the completion of its Series D financing, and the financing amount was not disclosed.
In 2021, Faraday Future went public through a merger with PSAC, obtaining $1 billion in funds and achieving a valuation of $4.5 billion.
Earlier this year, Faraday Future issued another financing announcement. In March, Faraday Future announced that the company had successfully signed a new cash financing totaling $41 million. This financing will be used to promote the company's business growth and development, including daily operations, the continuous promotion of the FX brand, and the implementation and advancement of key strategic projects to achieve the goal of the first FX vehicle rolling off the production line by the end of 2025.
Faraday Future stated that this financing will also be used to promote AI - related R & D, including the R & D and testing of end - to - end autonomous driving technology, focusing on the three core AI directions proposed in the previous AI strategy statement, as well as AI talent introduction and infrastructure construction to build a core AI team and infrastructure and expand capital cooperation opportunities.
After "Choking for Dreams"
In the ninth year after the slogan "Choking for Dreams", Boss Jia finally launched the FF91 2.0 of Faraday Future.
In May two years ago, Faraday Future released the FF91 2.0 Futurist Alliance. At the press conference, Jia Yueting claimed that the new car was an "ALL - Ability aiHypercar" and explained it from three dimensions: product technology, user value, and industry benchmarking.
"ALL - Ability" means that the vehicle is a combination of a "super sports car, luxury sedan, and SUV". "ALL - Hyper" refers to the hyper power engine + multi - vector, hyper AI hardware capabilities, and hyper AI engine. "ALL - AI" is the soul of the technology and product architecture and the gene of the silicon - based new species. FF's AI technology is AI - enabled throughout the entire process, in all scenarios, across the entire technology chain, and at all value ends.
In terms of performance, the FF91 2.0 can accelerate from 0 to 96 km/h in 2.27 seconds and has an estimated range of 381 miles (approximately 613.16 kilometers) per charge. In terms of intelligence, the car is equipped with a 27 - inch display screen, an 8 - megapixel wide - angle camera, and a noise - canceling microphone. With a 10G in - vehicle network, it can support live broadcasts, meetings, etc., and the front and rear rows can watch different live - broadcast contents. In terms of autonomous driving, the FF91 2.0 is equipped with lidar, high - resolution cameras, intelligent cameras, radar, and ultrasonic sensors, enabling functions such as automatic emergency braking, adaptive cruise control, lane - centering control, and intelligent parking.
However, the sales volume of this "Choking for Dreams" product is also quite "choking".
According to reports, from the latest documents submitted by Faraday Future to the U.S. Securities and Exchange Commission, in the first quarter of 2025, the company only sold two electric vehicles, one delivered in California and the other in New York. According to InsideEvs, since the production of the FF91 electric model started in March 2023, Faraday Future has only sold a total of 16 vehicles so far. Among them, 10 were sold in 2023 and 4 in 2024.
This sales data reflects that Faraday Future is facing great challenges in the electric vehicle market, and its operating conditions are not optimistic.
What's even more "choking" is that recently, it was reported that the U.S. Securities and Exchange Commission (SEC) has sent letters to FF founder Jia Yueting and President Wang Jiawei, warning them that they may soon face law - enforcement actions from the agency due to a three - year fraud investigation.
According to a previously released regulatory document, SEC staff have made an internal decision to recommend law - enforcement actions against this electric vehicle company, the above two executives, and two unnamed former employees.
It is reported that the SEC's investigation focuses on the "alleged false and misleading statements" related to the company's 2021 merger with a special purpose acquisition company (SPAC). The document also states that they will "plan to communicate with SEC staff together with Jia Yueting and Wang Jiawei to explain why law - enforcement actions should not be taken". A spokesperson for Faraday Future did not immediately respond to a request for comment, nor did Jia Yueting and Wang Jiawei.
In fact, the signs of the investigation emerged soon after Faraday Future completed its SPAC merger and went public in July 2021. As part of the listing process, the company introduced several new board members who had no previous association with it. After these directors accessed the company's operational information, they believed that Faraday Future had made misleading statements in its external information disclosure and had concealed Jia Yueting's actual control over the company. They also questioned the capital flow between the company and entities related to Jia Yueting and launched an internal investigation. The investigation was led by an external law firm and an accounting firm, and the conclusion confirmed the above problems. As a result, Jia Yueting was stripped of his power, and Wang Jiawei resigned for refusing to cooperate with the investigation. The directors leading the internal investigation submitted a large amount of relevant information to the SEC, and the SEC issued a subpoena to Faraday Future in March 2022. Around the same time, the U.S. Department of Justice also began an investigation into the company. According to U.S. technology media reports, this round of investigation is led by the SEC's Los Angeles law - enforcement office and has lasted for three years. During this period, Faraday Future occasionally disclosed that it had received multiple subpoenas, but until the disclosure of this notice, it was unclear whether the SEC would take law - enforcement actions.
Will LeEco's Story Repeat Itself?
Under a series of sad news, we can't help but think of LeEco, which was once extremely prosperous.
In 2003, Jia Yueting came to Beijing with the first pot of gold he had earned from the base station supporting business in Shanxi. In the era when video websites were growing wildly, he bet on copyright - paid content rather than UGC traffic. In 2007, he helped Sipole go public in Singapore, sowing the seeds for LeEco.com.
In August 2010, when LeEco.com landed on the A - share market with the halo of "the first profitable video website on the Growth Enterprise Market", its market value was less than 5 billion yuan. No one expected that just a few years later, LeEco's stock price would continue to rise.
From 2012 to 2015, the bull market provided Jia Yueting with the most powerful impetus. Under the closed - loop narrative of "platform + content + terminal + application", the market value of LeEco.com soared from 10 billion yuan. In 2012, it launched the Super TV, priced at the BOM cost, and sold 1.5 million units in a year, ranking among the top three in market share. In 2015, it entered the highly competitive mobile phone market with the strategy of "ecosystem subsidizing hardware". The Le 1 and LeMax had configurations comparable to flagship models but were 30% cheaper, with annual sales exceeding 5 million units and the market share once ranking among the top five.
Even more crazy was that in December 2014, he announced the SEE plan and declared his intention to build cars to compete with Tesla. The capital market responded with consecutive daily limit increases, and the price - earnings ratio of LeEco.com soared to 300 times.
To support the seven sub - ecosystems of TV, mobile phone, sports, cloud, finance, and automobile, Jia Yueting almost used all financing tools. However, LeEco's strategy of subsidizing hardware with content did not work.
The logic of "content feeding back hardware" never worked. Instead, it dragged the company into a vicious cycle of selling more and losing more, losing more and financing more, with the financing speed unable to keep up with the bleeding speed.
The hardware itself suffered excessive losses. Since LeEco launched the Super TV in 2013, it has adopted the strategy of "pricing below the mass - production cost". Since 2016, each TV has had an average subsidy of nearly 1,000 yuan. Taking the Le 1S mobile phone as an example, the BOM cost alone was as high as 1,310 yuan, while the official price was as low as 1,099 yuan, resulting in a direct loss of more than 200 yuan per unit. If channel, marketing, and after - sales costs were included, the loss was even greater. The more hardware was sold, the bigger the cash - flow hole became. The revenue from membership and advertising from 2015 to 2016 was far from enough to fill this gap.
The content - payment rate was also far lower than expected. LeEco originally planned to subsidize hardware with "membership + advertising". However, due to the serious homogenization in the video industry, high copyright costs, and price - sensitive users, the payment conversion rate has always hovered at a low single - digit level. In 2015, LeEco's Super TV had a user base of 4.5 million, but the membership revenue was only 3.7 billion yuan, with the annual ARPU per TV less than 100 yuan. What's more troublesome is that a large number of users only bought the low - priced hardware and did not renew their memberships. The hardware became a pure "traffic funnel" rather than a "cash cow".
Moreover, external variables magnified the fragility of the model. Since the second half of 2016, the prices of core components such as liquid - crystal panels and memory chips have generally increased. LeEco could neither raise prices (for fear of losing market share) nor adjust its supply chain in time, resulting in further magnified losses. At the same time, the capital market became colder, and the windows for private placement and bond issuance narrowed. The company could no longer "subsidize operations with capital" as it did in 2015, and the capital chain suddenly broke.
Moreover, the so - called ecological synergy was just on paper. Jia Yueting hoped that multiple scenarios such as TV, mobile phone, sports, and automobile could cross - subsidize each other. However, after independent accounting, each sub - ecosystem was in a state of blood loss. New businesses such as Yidao Yongche and LeSports became new money - burning machines. When the parent company could no longer provide continuous support, the entire "ecological transformation" quickly degenerated into a "reversal of the ecological situation", and each business line successively came to a halt.
After that, a series of bad news caused LeEco's stock price to continue to fall. Jia Yueting only left the words "I'll be back next week" and continued to "choke for his dream" in the car - building business.
Currently, the high - end electric vehicle market is also facing increasingly intense competition. Technologies such as 800V high - voltage, SiC silicon carbide, lidar, 5C ultra - fast charging, and urban NOA, which were once regarded as moats, are now being touted as standard configurations at new product press conferences. The window period for technological differentiation has been compressed to almost zero.
What's even more cruel is that the price war has spread from the low - end to the high - end market. In the first half of 2025, the sales volume of new energy vehicles priced between 300,000 and 400,000 yuan decreased by 14 - 15% year - on - year. The terminal price of the BMW i3 dropped from 350,000 yuan to less than 200,000 yuan at once, and the Audi A6L was cleared with a discount of nearly 100,000 yuan. NIO and Zeekr were forced to follow suit. Leapmotor and Chery Xingjiyuan directly broke through the price ceiling with "800,000 - yuan - level configurations at 200,000 - yuan - level prices". Ideal, Wenjie, and Avita, which adopt the extended - range route, are using the "range illusion" of being able to run on both gasoline and electricity to intercept potential customers of pure - electric vehicles, forcing pure - electric flagship models to further increase costs with 97kWh large - capacity batteries and 5C ultra - fast charging. Traditional luxury brands are not sitting idle. The BMW 7 Series and Audi A8L are holding their ground in the executive - class sedan market above 800,000 yuan through intelligent upgrades and significant price cuts. Toyota and Volkswagen are leveraging their global supply - chain advantages to quickly introduce high - end plug - in hybrid models to reduce costs. On the policy front, the support is also gradually retreating. From 2026 to 2027, the purchase tax for new energy vehicles will be halved, and it will be fully restored in 2028. If there are changes in the "tax exemption for vehicle - battery separation" on which the battery - swapping model depends, NIO's high - end user base may be shaken instantly. The competition in the high - end electric vehicle market is no longer just about "building a good car". It is about continuously defining new user value in the three paradoxes of technological leadership and cost control, brand premium and affordable prices