Faraday Future has just gained a little more time on this earth as it announces a joint venture with Chinese internet company, The9.
The company that unfortunately is more famous for its financial troubles rather than its near production ready luxury electric car, has found new lifeline. Recently the company has signed a joint venture, split 50/50, with The9 Limited to produce an electric car based on the FF91 in China, called the V9.
The outline of the agreement is as follows:
- Faraday Future (FF) today signed a joint venture agreement with The9 Limited (Nasdaq: NCTY). The joint venture will serve the China market with manufacturing, marketing, distribution and sale of Faraday Future’s new brand V9 model, an all-new luxury EV based on the technology and design concepts of FF’s flagship FF 91.
- FF will make contributions to the joint venture including FF’s use rights in a piece of land located in China for EV manufacturing and an exclusive license to manufacture, market, distribute and sell Faraday Future’s new brand V9 model with the potential option for other future vehicles in China.
- The9 will be a 50% partner in the joint venture with control over certain strategic business operations, with The9 making up to US $600 million in total capital contributions, contingent on the fulfillment of specified funding conditions.
- The expected annual production capacity of the joint venture is 300,000 cars, and the first pre-production car is expected to roll off the production line in 2020.
The9 has put down an additional $5 million deposit. In terms of their $600 million contributions, they will be made directly to the joint venture, and not to Faraday’s US operations. The contributions will be made in three $200 million packages contingent on Faraday fulfilling the following requirements as outlined in the SEC filing:
- Set up the joint venture in Hong Kong
- Provide evidence that it has secured land and local funding for a factory in China
- Deliver a concept design for the V9
Faraday has around two to three months to accomplish each one of those goals, as a pre-production V9 is expected to be completed by 2020.
In terms of who The9 is, it is an internet company that got its start in 1999 where it, “launched the “Ninth City” online community in which users can use virtual currency to conduct online social and exchange activities such as playing games, reading, music, etc.” Additionally they help exclusive rights to distribute World of Warcraft in China until 2009.
Currently they are involved with block chain and continue to distribute games in China.
Jun Zhu, CEO of The9 had the following to say about the venture:
“We are very pleased to see The9, an Internet company with more than a decade of industry experience, to partner with FF, a high-tech internet mobility company, to bring high-quality luxury electric vehicles to the Chinese marketplace. FF has the industry leading product technology and strategies, and a team of world-class top talents and resources. Leveraging the technology capabilities of FF, we believe our alliance with FF provides us with a great opportunity to pursue the fast-growing market of electric vehicles in China. We look forward to a long and successful relationship with FF and we honor this step to diversify our business portfolio as a high-tech Internet company.”
This is certainly a much needed infusion for Faraday who remains optimistic about the prospects of its FF91, stating that they are making “steady progress” and that production will be ready later this year.
Let’s hope that it’s not too little, too late.
What do you guys think? Let us know down in the comments below.
Source: Faraday Future