LeEco chairman Jia Yueting.REUTERS/Jason Lee
- The electric-car startup, Faraday Future is suing two former executives who left the company and started their own EV business.
- Faraday Future is accusing former CFO Stefan Krause and ex-CTO Ulrich Kranz of stealing its intellectual property and luring top talent away from Faraday to their own company, Evelozcity.
- The lawsuit is happening as Faraday Future continues to struggle to find stable footing in an increasingly competitive market, and as its billionaire tech CEO, Jia Yueting, faces a debt crisis.
Struggling electric-car startup Faraday Future is suing two former executives, accusing them of luring away its top talent and stealing its trade secrets.
The Los Angeles-area company alleges that former chief financial officer Stefan Krause and ex-chief technology officer Ulrich Kranz, who left Faraday last year and started the electric-vehicle company, Evelozcity, coaxed at least 20 former Faraday employees to their startup, and that some of Faraday’s intellectual property was stolen in the process, multiple news outlets reported on Monday.
Evelozcity denied the allegations in a statement to Business Insider on Monday: “We do not have, nor do we need, any technology from Faraday Future,” the company said.
It added: “This complaint continues Faraday’s pattern of hurling false and inflammatory accusations against us. We will respond to the many recklessly inaccurate allegations in this desperate lawsuit at the appropriate time.”
Krause, in the few months that he worked at Faraday Future in 2017, set out to raise $1 billion for the company, which had been struggling under the weight of unpaid bills, lawsuits, and an exodus of employees as its finances dwindled.
Despite speaking with more than two dozen potential investors, the cash-raise was largely unsuccessful, current and former employees previously told Business Insider. That shortfall was due in part to anxiety over the embattled tech entrepreneur Jia Yueting, who controls the company.
A source with knowledge of Faraday’s fundraising efforts told Business Insider in December that the company secured new investment, but the source and the amount remained unclear. Faraday cites that new investment in its lawsuit against Evelozcity — again with naming the source of the funds or the amount. It is possible that the information could be revealed if the legal proceedings run their course.
Meanwhile, Jia faces a mounting debt crisis in China, where he started, and later stepped down from, the tech conglomerate Leshi Internet Information & Technology in May 2017. Chinese regulators have ordered him back to the country to address his debt-ridden holdings. Leshi is also pursuing Jia for equity stakes in other automotive startups in which he owns a stake.
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