Electric car company Faraday Future is seeking $1bn (£780m) of further investment to keep its dreams of rivaling Tesla afloat, as funding from parent company LeEco dries up.

The need for a substantial cash injection comes in the wake of difficulties spreading across LeEco, whose owner, Chinese billionaire Jia Yueting, stepped down as CEO earlier this week. LeEco also announced it would lay off around 70% of its US operations, making 325 employees redundant.

California-based Faraday Future said this will not affect its own operations, but it has already suffered from its fair share of setbacks, senior staff resignations and financial instability.

LeEco's cost-cutting measures are in part due to expanding too quickly. Once known as the Netflix of China, the company is involved with smartphones, televisions, autonomous cars and a film streaming service.

An unnamed source speaking to Bloomberg says Jia, who has already ploughed $300m of his own money into Faraday Future, will not be investing any more in the car maker. FF, as it prefers to be called, revealed its first production car, called the FF 91, at the CES technology show in Las Vegas in January. The high-end electric saloon car with over 1,000 horsepower is expected to go on sale in 2018.

The company is seeking $1bn of investment to stabilise its finances and protect itself from the issues impacting LeEco, the person said, claiming to have direct knowledge of the matter. FF has begun meeting potential investors and is in the process of selected advisers, they added. These candidates are reportedly "large scale investors" and include sovereign wealth funds. Faraday Future hopes the funding round will be completed later this summer.