The9, a Shanghai online game developer and operator, has come to the rescue of cash-strapped Faraday Future, the electric vehicle startup founded by Chinese entrepreneur Jia Yueting in Los Angeles.
The two companies signed a deal Sunday to set up a 50-50 joint venture in China, with The9 agreeing to invest up to $600 million (4 billion yuan) in a partnership that will produce EVs to sell in China, Faraday Future said. In addition to its technology know-how and production license, Faraday will contribute land it purchased in Deqing in east China's Zhejiang province to construct an assembly plant.
The first product to be built at the plant will be the FF V9, an electric crossover adapted from Faraday Future's FF91 luxury crossover.
The joint venture is expected to achieve annual output of 300,000 EVs in the long term. The pre-production version of the V9 is due to roll off the production line in 2020, according to Faraday Future.
Jia, founder of video streaming company LeEco in Beijing, established a U.S. subsidiary, Faraday Future, in Los Angeles in 2016 with plans to build a $1 billion EV factory in Nevada. But a severe cash crunch forced Faraday Future to scrap the plan and lease an existing manufacturing facility in Hanford, California, as its assembly plant instead.
In June, Faraday Future tapped Evergrande Health Industry Group, the health care subsidiary of China's second-largest property developer, China Evergrande Group, as a new investor. Evergrande Health agreed to invest up to $2 billion in Faraday Future to fund EV output in the U.S. and China. But the plan went sour in October and Faraday Future's efforts to produce the FF91 was brought to a standstill. Jia alleged that Evergrande Health sought to gain control of his company by holding back additional funding following an initial payment of $8 million.
Faraday Future and Evergrande Health settled the legal dispute and went their separate ways in December.