The Securities and Exchange Commission (SEC) has closed its investigation into electric vehicle startup Faraday Future without taking any enforcement action, according to sources familiar with the case.
Faraday Future, which was founded in 2014 by Jia Yueting, had been under investigation since 2022 over allegations of making false and misleading statements when it went public in a 2021 merger with a special purpose acquisition company (SPAC). The SEC was also probing whether the company faked sales of its first electric vehicles in 2023.
The closure of the investigation comes as a surprise, given that the SEC had sent Faraday Future a Wells Notice in July 2025, indicating that staff had recommended enforcement action. However, the agency has decided not to pursue the matter further, despite the recommendations of its staff.
The Investigation
The SEC's investigation into Faraday Future lasted for nearly four years, during which time the agency sent multiple subpoenas and took depositions from former employees and executives. The probe was launched in 2022, after the company went public and raised around $1 billion in funding.
Faraday Future had been accused of making false and misleading statements about its financial condition and business prospects, as well as faking sales of its electric vehicles. The company had also been sued by former employees, who alleged that they had been misled about the company's financial condition and had suffered retaliation for speaking out.
Company Response
In a statement, Faraday Future founder Jia Yueting said that the company was pleased that the investigation had been closed without enforcement action. "We can now put all our energy into strategy execution," he said.
Faraday Future has been struggling in recent years, with the company facing financial difficulties and layoffs. However, the closure of the SEC investigation is likely to be seen as a positive development for the company, which is still trying to sell its electric vehicles and has recently expanded into new areas such as robotics and cryptocurrency.
Market Context
The closure of the SEC investigation into Faraday Future comes amid a broader trend of decreased enforcement actions by the agency. In its 2025 fiscal year, the SEC initiated only four cases against publicly-traded companies, a significant decrease from previous years.
The SEC's decision not to pursue enforcement action against Faraday Future is likely to be seen as a positive development for the company and its investors. However, it remains to be seen how the company will fare in the long term, given its ongoing financial struggles and the intense competition in the electric vehicle market.
