Electric vehicle startup Faraday Future made its SPAC debut on Nasdaq on Thursday.
Details: The embattled EV brand closed its acquisition with SPAC Property Solutions Acquisition Corp Wednesday evening. The deal closing brings in the roughly $1 billion which was on the blank check company's balance sheet.
Faraday Future, which was formerly controlled by the notorious Chinese tycoon Jia Yueting, said its luxury electric crossover FF 91 is coming to market next year. "Now as a public company, FF will capture the growing market with an entirely differentiated product," the company said.
Due to Beijing’s strict forex regulations, the government of Zhuhai, which hopes to lure Faraday to set up a base in the city, had to pull its $175 million investment as part of a private placement in a SPAC, South China Morning Post reported, citing sources familiar with the matter.
Shares of Faraday Future closed at $13.98, up 1.45%. At the recent share price, Faraday has a market capitalization of about $4.5 billion.
Context: Support from local government is important to electric car manufacturers because of its influence in land allocation, fundraising, promotion, etc. US-listed Chinese EV brands Nio and Xpeng Motor also have local governments as investors.
Since last year, SPAC deals for the automotive industry have surged, but building vehicles is a complex process and very capital-intensive. EV start-ups such as privately held Rivian and Lucid, which is soon expected to go public via a SPAC merger, have delayed production and delivery of their first vehicles.