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Electric Car Startup Sued Again for Allegedly Failing to Pay Contractor

By William Vogeler, Esq. on March 06, 2017 | Last updated on March 21, 2019

The future of Faraday Future, the electric car company, looks a lot like yesterday -- dim.

Before it could roll out a production vehicle, the company has been sued again. In January, a visual effects company sued Faraday for not paying its bills. Now, another contractor is suing for unpaid bills. Together, the plaintiffs allege the car company is behind by almost $2.5 million.

Add that to more than $10 million in lawsuit claims filed in December, and the future does not look bright for the electric startup.

Billionaire Backup?

Faraday tried to keep some shine on its image at the Consumer Electronics Show in Las Vegas in January. Chinese billionaire and investor Jia Yueting joined Faraday senior vice president Nick Sampson to unveil another prototype at the big trade show.

It was seen as a second chance for a company that started in 2014, ballooned to 1,400 employees and promised to be the "Tesla killer." Faraday staged its sleek concept car -- an electric, self-driving super coach -- with sizzle. The only problem was, business watchers said there was no steak.

Business Insider caught up with Faraday sources who said the company is in shambles. "If CES doesn't bring in fresh investors, it's over between February and May," one source told the e-zine before the trade show.

Millions Behind

In the new lawsuits, the plaintiffs seek damages for breach of contract. In the visual effects case filed in January, The Mill says Faraday didn't pay $1.8 million for the product demonstration at CES.

In the case filed this week, Electric Services Solutions says the company didn't pay for upgrades to Faraday's headquarters and other facilities. The complaint alleges $580,000 in damages, and asserts mechanic liens that may make it hard for Faraday to keep the lights on.

Meanwhile, investors have not stepped in to save Faraday from its financial problems. After the CES show, Jia told a Chinese news agency that his parent company had not raised more money for the startup.

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