Suspected False Sales by Faraday Future Prompts Legal Action

Two internal whistleblowers at Faraday Future claim the troubled EV company has been lying about some of the few sales it has announced to date. What’s more, they claim Faraday Future has been performing repairs on these early customer vehicles without proper documentation or work authorization, which he says could put the company’s license with the California Bureau of Automotive Repair at risk. Faraday Future allegedly fired Guerrero on January 18 in retaliation for speaking up, according to his complaint. Jia’s control over Faraday Future has always been a thorny issue. Jia is still not CEO, but Guerrero and Xie claim in their lawsuits that he “heads a shadow organization” that controls the company’s destiny.

According to two internal whistleblowers at Faraday Future, the troubled EV company has been deceiving the public about its supposed sales. In addition, these whistleblowers claim that founder Jia Yueting has used the company’s HR department as a means of retaliation against employees who speak out about these alleged fabrications.

The employees, Jose Guerrero and Victoria Xie, have filed separate lawsuits against Faraday Future and Jia, along with the company’s HR head Nan Yang, in Los Angeles Superior Court. The lawsuits accuse the company of wrongful termination, breach of contract, and causing emotional distress.

The suits also shed light on the ongoing struggle within Faraday Future between its founder Jia and the company’s leadership team. Despite being sidelined in 2022 after an internal investigation, Jia allegedly continues to assert control over the company.

The previously unreported lawsuits come amidst ongoing financial struggles for Faraday Future, which has been forced to lay off and furlough employees in order to save money and avoid eviction from their Los Angeles headquarters. Meanwhile, the company remains under investigation by the Securities and Exchange Commission and the Department of Justice.

We reached out to a spokesperson for Faraday Future for comment on the lawsuits and allegations, but have not received a response. Guerrero and Xie, through their legal counsel, have declined to comment beyond the claims made in the court filings.

“[Faraday Future] lied about the first four publicly touted sales of its electric SUV, the FF91.” – Whistleblowers Jose Guerrero and Victoria Xie

In their internal whistleblower letter submitted to the company’s general counsel on December 6, 2023, Guerrero and Xie allege that Faraday Future prematurely announced sales of its electric SUV before the sales had been completed. They also claim that three out of the four announced sales were never fully paid for, and the fourth was only paid for more than 60 days after the supposed sale.

The lawsuits also mention that Faraday Future announced 10 total sales in 2023, despite these early sales still being in question. The whistleblowers further claim that sales staff who voiced concerns about these ‘premature’ announcements were met with retaliatory actions from the leadership team in Jia’s department, who allegedly cited the need to boost the company’s stock price.

Guerrero and Xie go on to accuse Faraday Future of executing these early sales agreements without properly inspecting the vehicles beforehand. They claim that Jia’s team pressured the sales staff to submit DMV paperwork without the necessary insurance and cash payments. And according to the lawsuits, Faraday Future sent non-road approved software to these early customer cars without properly disclosing it to the National Highway Traffic Safety Administration, potentially violating the Transportation Recall Enhancement Accountability and Documentation Act.

They also allege that the company has been performing repairs on these early customer vehicles without proper documentation and work authorization, which could jeopardize Faraday Future’s license with the California Bureau of Automotive Repair.

“When [Defendant Mr. Jia] and his trusted circle inquired about regulatory requirements, it was done so with the clear intention to ‘creatively’ circumvent the rules,” the lawsuits claim.

Xie, who was employed as Faraday Future’s “Go-to-Market Project Manager and Launch Manager,” claims she was fired just two days after submitting the whistleblower letter in retaliation for speaking out. She also asserts that Jia and Yang played a direct role in her termination, and that she had attempted to file an arbitration claim against the company on December 22, but was unable to do so.

Similarly, Guerrero, who worked as a Senior Director of Sales and Aftersales at Faraday Future, claims he was fired on January 18 in retaliation for speaking out about the alleged misrepresentations. He also attempted to file an arbitration claim against the company, but like Xie, was unable to do so due to Faraday Future’s failure to pay the required fees.

As previously reported, Jia’s control over Faraday Future has been a contentious issue within the company. Despite not serving as CEO on paper, he was secretly running the company during its early years. Jia eventually took on the official role of CEO, but brought in a former BMW executive in 2019 to appeal to investors. The company went public in 2021 after merging with a special purpose acquisition company.

However, in late 2021, Jia was reprimanded after an internal probe was launched into claims from a short-seller that Faraday Future had overstated its preorders and that Jia had not properly disclosed his movement of company funds. The investigation resulted in Jia being sidelined from his role as CEO in 2022.

  1. Jia covertly ran Faraday Future during its early years despite not being CEO on paper
  2. Jia took over as CEO, but brought in a former BMW exec in 2019 to appeal to investors
  3. Firm went public in 2021 after merging with a special purpose acquisition company
  4. Jia was reprimanded in 2022 after an internal probe into claims from a short-seller that Faraday Future had overstated preorders
  5. Jia was later sidelined from his role as CEO as a result of the investigation

Xie and Guerrero claim in their lawsuits that Jia still wields significant control over the company, with frequent meetings taking place at one of the mansions he owns on the Pacific coastline. They assert that all major operational decisions are approved by Jia and his trusted lieutenants.

Read the full lawsuit filed by Guerrero here, and Xie’s lawsuit here.

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Kira Kim

Kira Kim is a science journalist with a background in biology and a passion for environmental issues. She is known for her clear and concise writing, as well as her ability to bring complex scientific concepts to life for a general audience.

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