Two insiders at Faraday Future claim the troubled EV company lied about some of the few sales it has announced to date. They also claim that founder Jia Yueting has “weaponized” the human resources department of the EV startup to retaliate against anyone who speaks out about these alleged misrepresentations.
The workers, Jose Guerrero and Victoria Xie, have made those claims in a pair of recently filed lawsuits against Faraday Future and Jia — as well as the company’s head of HR, Nan Yang — in Los Angeles Superior Court, alleging that the termination of employment was illegal, a breach of contract and caused emotional distress.
Both lawsuits also highlight what has been Faraday Future’s central tension: that its founder, Jia, allegedly continues to claim control of the company despite being ousted in 2022 as internal catheter result.
The previously unreported lawsuits come as Faraday Future continued to lay off and lay off employees to conserve what little cash it had left, to the point where it was nearly evicted from its Los Angeles headquarters after missing multiple lease payments. All of this is happening while the company is still facing active investigations by the Securities and Exchange Commission and the Department of Justice.
We sent an inquiry to a Faraday Future representative last week asking for comment on the lawsuit or the allegations, but the company did not respond. We’ll update this story if they do. Guerrero and Xie, through counsel, declined to comment beyond the allegations in the filing.
Complaints of Counterfeit Sales and Retaliation
In an internal whistleblower letter submitted to the company’s general counsel on December 6, 2023, Guerrero and Xie alleged that Faraday Future lied about the first four publicly advertised sales of its electric SUV, the FF91.
Guerrero, who was Senior Director of Sales and Aftersales at Faraday Future, and Xie, who was the company’s “Go-to-Market Project Manager and Launch Manager,” say the company announced these deliveries before the process was complete sales. They claim three of the four were never paid in full, at least at the time the whistleblower letter was submitted, and the fourth was only paid for “more than 60 days after the ‘sale'” was announced. Faraday Future has since claimed to have delivered 10 vehicles throughout 2023.
Guerrero and Xie allege that when the sales staff countered these “premature” announcements, the leadership team in Jia’s division “continued to mention the need to announce sales to increase the Company’s stock price and submitted that the staff put compliance concerns in HR retaliation.”
Guerrero and Xie continue to allege that Faraday Future executed these sales agreements with its original customers without performing pre-delivery inspections on the vehicles, and that one of Jia’s lieutenants dismissed concerns about this. They say the sales team was pressured to submit DMV paperwork “without the required insurance and cash payments.” They also allege Jia’s team shipped “unapproved software” to those early customer cars and failed to properly document or disclose the software’s release notes to the National Highway Traffic Safety Administration, potentially violating the Transportation Recall Improvement Accountability and Documentation Act .
In addition, they allege that Faraday Future has performed repairs on these early customer vehicles without proper documentation or a work permit, which they say could jeopardize the company’s license with the California Bureau of Auto Repair.
“When [Defendant Mr. Jia] and his inner circle asked about regulatory requirements, he did so with the clear intent to ‘creatively’ circumvent the rules,” the lawsuits allege.
Xie says in her complaint that she was fired “in retaliation for the protected complaint” just two days after submitting the letter, and alleges that Jia and Yang were directly involved in her firing. Xie attempted to file an arbitration claim against the company on Dec. 22, according to the complaint. But Faraday Future failed to pay the required arbitration fees and missed the 30-day window to do so, making it possible for it to file a lawsuit in the Supreme Court, the complaint alleges.
Faraday Future allegedly fired Guerrero on Jan. 18 in retaliation for speaking out, according to his complaint. He also filed for arbitration against the company, and when Faraday Future failed to pay the fees, he was also free to file a lawsuit in the Supreme Court.
Jia’s control of Faraday Future has always been a thorny issue. As previously mentioned, Jia secretly ran the company in its early years, despite the fact that the company listed someone else as its CEO on paper. He eventually took over as CEO, but brought in a former BMW executive to take on that role in 2019 in order to attract investors. The company finally went public in 2021 by merging with a special purpose buyout company.
Jia was reprimanded as a result of an internal investigation that began in late 2021. That investigation looked into claims by a short-seller that Faraday Future had overstated the number of pre-orders for its vehicles, as well as a lack of proper disclosures about the figures. founder’s movement of money in and out of the company. In 2022, people close to Jia helped lead a boardroom coup all while being investigated by the SEC and DOJ.
Jia is not yet CEO, but Guerrero and Xie allege in their lawsuits that he is the “head of a shadowy organization” that controls the company’s fate. They say that he and his trusted lieutenants meet in one of the mansions he bought on the Pacific coast almost every week.
“All major operational decisions within the core business functions, including human resources, budget allocations, vehicle release and financial services, are directed and approved by Jia,” the lawsuits allege.
You can read Guerrero’s lawsuit hereand Xie’s lawsuit here.
