Headline & intro
When an EV startup that delivered just four cars in a year quietly sends $7.5 million to an entity tied to its controversial founder, the problem isn’t batteries or supply chains – it’s governance. Faraday Future’s latest proxy filing, detailed by TechCrunch, reads less like the story of a struggling automaker and more like a case study in how the SPAC era broke basic investor protections. In this piece, we’ll unpack what actually happened, why regulators walked away, and what this says about the future of high‑risk EV bets – especially for European investors still tempted by “next Tesla” narratives.
The news in brief
According to TechCrunch, Faraday Future disclosed in a new proxy filing that it paid around $7.5 million in 2025 to FF Global Partners LLC, an entity the company itself describes as an affiliate of founder Jia Yueting. This happened in a year when Faraday Future delivered four vehicles and booked nearly $400 million in losses, while pivoting toward selling cheaper vans and robots imported from China.
The filing breaks the $7.5 million into several parts: recurring consulting fees of about $100,000 per month, a $2 million bonus payment, roughly $1.7 million to repay loans from FF Global, and a remaining $2.6 million that is not clearly explained. FF Global is controlled by a small group of voting managers that includes Jia, his business associates and a family member. It is also a major shareholder in Faraday Future.
These payments took place while the U.S. Securities and Exchange Commission (SEC) was investigating Faraday Future over related‑party transactions, the true extent of Jia’s control when the company went public via SPAC in 2021, and how it portrayed early sales activity. TechCrunch reports that the SEC closed the four‑year probe in March 2026 without taking enforcement action, despite previously signalling it was considering such steps.
Why this matters
On one level, this is just another troubled EV startup burning cash. On a deeper level, it’s a vivid illustration of how weak governance structures can turn public companies into extraction machines for insiders.
The immediate beneficiaries of these arrangements are obvious: Jia and the tight circle around FF Global. Through consulting contracts, bonuses, and loan repayments, they are able to pull millions out of a company that has yet to prove it can build and sell vehicles at scale. Meanwhile, common shareholders are left with a business that shipped four cars, lost hundreds of millions, and still owes money to other entities tied to the same founder.
For employees, suppliers, and customers, this raises serious questions about priorities. Every dollar spent on opaque consulting agreements is a dollar not spent stabilising the supply chain, improving service, or shoring up the balance sheet. In a capital‑intensive industry like automotive, that trade‑off can be existential.
From a market‑structure perspective, Faraday Future shows the darker side of the SPAC boom. The company reached public markets via a mechanism designed to move fast and rely heavily on forward‑looking projections. Now, years later, investors are discovering not just execution risk, but structural conflicts: a founder previously sidelined for governance concerns re‑installed as CEO, an affiliated entity effectively controlling management, and a history of board turmoil severe enough that some directors reportedly feared for their safety.
The message to investors is blunt: ownership and control matter as much as technology. A glossy investor deck and a concept car in Vegas are meaningless if the capital structure and governance allow insiders to treat a listed company like a personal fintech.
The bigger picture
Faraday Future is not an isolated failure; it’s part of a pattern that has defined the post‑2020 EV SPAC era. We’ve already seen high‑profile collapses or restructurings at Lordstown Motors, Arrival, and others that promised to be “the next Tesla” but lacked the operational depth – and sometimes the basic honesty – to justify their valuations.
The common threads are striking:
- Founders with outsize influence preserved through complex holding companies and special share classes.
- Aggressive use of projections made possible by SPAC rules, rather than traditional IPO scrutiny.
- Related‑party transactions that blur the line between company and founder’s personal empire.
TechCrunch notes that the SEC ultimately closed its four‑year investigation into Faraday Future despite previously indicating interest in enforcement. That decision sits against a broader backdrop of what the article calls a historic lull in U.S. white‑collar enforcement in the current political climate. Whether or not one agrees with that characterisation, the optics are clear: after years of hype, many retail investors are left holding shares in companies that delivered more drama than vehicles, while regulatory consequences have been limited.
Meanwhile, the industry itself is consolidating. Capital is flowing toward incumbents (Volkswagen, Hyundai, GM) and a small number of proven disruptors (Tesla, BYD), while speculative players struggle to raise cash. Chinese manufacturers are flooding global markets with relatively affordable EVs. In this landscape, any startup that carries heavy governance baggage is at a structural disadvantage: when interest rates are high and supply chains are tight, investors demand boring things like transparency, independent boards, and predictable cash flows.
Faraday Future, with its intricate web of founder‑linked entities and history of boardroom conflict, looks like a relic of a frothier time.
The European / regional angle
For European readers, it may be tempting to treat Faraday Future as a uniquely American saga of celebrity founders, lax SPAC rules, and Silicon Valley fairy tales. That would be a mistake.
First, many EU retail investors participate directly in U.S. markets via low‑fee brokerages, and indirectly via ETFs and thematic funds. When those funds chase “disruptive innovation” or EV thematic baskets, companies like Faraday Future can end up in European portfolios almost by stealth.
Second, Europe has had its own bruising encounters with governance failures in high‑growth stories – from Wirecard in Germany to the quieter implosion of several local SPACs in Amsterdam and Frankfurt. ESMA and national regulators have already warned about SPAC risks, particularly around conflicts of interest and optimistic projections. Faraday Future’s trajectory validates those concerns in painful detail.
EU rules are, on paper, stricter around related‑party transactions and board independence than what we often see in U.S. growth companies. The Shareholder Rights Directive II, national corporate governance codes, and the Market Abuse Regulation all push issuers toward greater transparency. But rules only help if investors actually read the disclosures. In Faraday Future’s case, the information about Jia’s influence and FF Global’s control is in the filings – investors simply chose to believe the dream anyway.
For European OEMs and startups trying to compete in EVs, there’s another lesson: capital markets will not tolerate governance theatre for long. Companies like Rimac, Northvolt or various Berlin‑ and Paris‑based mobility startups know that raising billions in a post‑SPAC world requires conservative accounting, clean related‑party policies, and boards that don’t look like a family reunion. Faraday Future shows what happens when you ignore that reality.
Looking ahead
Barring a dramatic turnaround, Faraday Future looks destined for one of a few well‑trodden paths: a painful restructuring, a fire‑sale to a larger industrial player (likely with Chinese links, given its current supply base), or a slow fade into micro‑cap obscurity punctuated by occasional financing dramas.
The company’s ability to raise fresh capital will depend less on its product roadmap and more on whether it can convince new investors that the era of generous founder‑linked payouts is over. That will be difficult as long as FF Global and Jia retain effective control and continue to appear in the list of major counterparties.
For regulators, the Faraday story isn’t over either. Even if the SEC has closed this particular probe, plaintiffs’ lawyers and activist shareholders will study every related‑party line item. Any future capital raise, merger or asset sale involving Faraday Future or FF Global is likely to face intense scrutiny.
Investors should watch a few key indicators:
- Changes in governance: does the board gain genuinely independent members, or does control remain concentrated?
- New disclosures of related‑party transactions in future filings.
- Cash runway versus stated production and sales targets.
- Any moves by major creditors or stock exchanges that could force strategic change.
More broadly, expect a tougher environment for any EV or mobility company trying to go public with complex control structures. The SPAC window that allowed stories like this to reach public markets is effectively closed. The next generation of listings – in New York, Frankfurt, Amsterdam or elsewhere – will face investors and regulators with fresh scars.
The bottom line
Faraday Future is no longer a story about futuristic cars; it’s a story about what happens when lax governance meets speculative capital. The $7.5 million paid to a founder‑linked entity in a year of four deliveries is a signal flare for anyone still buying into “next Tesla” narratives without reading the footnotes. For European investors, the takeaway is simple: in high‑risk EV bets, scrutinise control structures and related‑party deals as carefully as you scrutinise range and acceleration. The technology may be electric, but the oldest risk on the market remains the same – insiders getting paid while everyone else gets diluted.
