EV SPAC Faraday Future now has the attention of the DOJ

The DOJ’s request for information is related to the SEC probe, according to a securities filing submitted by the electric vehicle startup Thursday. Faraday said it’s “in the process of responding to, and intends to fully cooperate with, such request.”

The disclosure comes just one day after a Faraday Future said during an investor presentation that it plans to open a factory in China as early as 2025.

The SEC subpoenaed several key Faraday Future executives in last March, a move that was prompted by the company’s own internal investigation.

The internal review conducted by a special committee of directors found employees had made inaccurate statements to investors during the company’s special purpose acquisition merger in 2021, and that its “corporate culture failed to sufficiently prioritize compliance.” For example, the committee found that the startup’s claim of receiving more than 14,000 reservations for its FF 91 vehicle was potentially misleading because only several hundred of those reservations were paid.

A restructuring of Faraday Future’s board, demotion of the founder, pay cuts to top executives and the suspension of another followed.

Faraday’s continued regulatory woes are par for the course with EV companies that went public via SPAC mergers over the last two years. Eager to raise the funds needed to succeed, several companies, like Lordstown Motors, Canoo, Electric Last Mile Solutions and Lucid Group, have potentially over-hyped their own abilities to create a profitable business, and as a result are subject to a string of SEC and DOJ investigations.

Shares of Faraday Future stock are down 1.4% at 5:43 p.m. EDT in after hours trading.