Faraday Future became the latest electric vehicle firm to join the SPAC frenzy as it announced it will go public through a merger with Property Solutions Acquisition Corp on Thursday in a deal valuing the combined entity at $3.4 billion.
With the global EV business, dominated by the likes of Tesla Inc, growing at an explosive pace, a flurry of EV makers are rushing to tap the red-hot initial public offering (IPO) market.
Other prominent players in the sector such as Fisker Inc and Nikola Corp also went public through mergers with so-called special purpose acquisition companies (SPACs) last year.
The deal, supported by a private investment of $775 million, is expected to fetch Faraday Future $1 billion in gross proceeds.
Also, Faraday plans to set up a new base in China and enlist Geely for contract manufacturing services.
Significant Chinese involvement could be an early policy test for U.S. President Joe Biden’s new administration, given escalating concerns in Washington over national security implications of China’s technological ascendance.
SPACs have emerged as a popular way for firms seeking to go public with less regulatory scrutiny and more certainty about valuation than traditional IPOs.
Faraday Future was founded in 2014 by former chief executive officer, Jia Yueting, who filed for bankruptcy in October 2019 and planned to turn over his stake to repay around $2 billion in personal debts. Yueting is now serving as the chief product and ecosystem officer at the company.
The combined company will be listed on Nasdaq under the ticker symbol “FFIE”, the companies said.