Faraday Future is down to $30 million in the bank and announced another two-month delay before the first shipments of the company’s FF 91 Futurist electric car.
According to a report by Reuters, the company is seeking “substantial additional financing” to deliver the first of about 400 pre-ordered vehicles. The report also reveals that Faraday has not completed the required crash testing to deliver its vehicles to consumers. Messages left with Faraday Future by TheDetroitBureau.com were not returned at the time of publication.
On one positive note, Faraday told Reuters that its first production vehicles would be finished today. Faraday stock dropped to $0.27 per share by mid-day, losing 13.8% in mid-day trading.
Production began last month
According to a news release from Faraday, production of the FF 91 Futurist began March 29 at the company’s plant in Hanford, California.
“Start of Production (SOP) of the FF 91 Futurist Alliance marks FF’s most solid step as a disruptor of the traditional ultra-luxury automotive civilization,” said Faraday’s founder, YT Jia, on the occasion. “It’s a promise we made to our users and shareholders, and we have delivered it today successfully. This shows that FF has entered a new phase under the governance and operation of the new board and management. We believe FF will quickly restore its due value to the marketplace.”
Faraday previously planned to deliver its first customer vehicles by the end of April. But now the company has told Reuters that customers who have paid the full price of the vehicle, about $180,000, during the month of May could take delivery at the end of June.
February funding depleted
In February, Faraday stated it secured enough money to begin production. The company’s announcement described financing commitments of $135 million in convertible secured notes. The money came from ATW Partners and Acuitas Capital and certain other unnamed investors.
“We will deliver the FF 91 Futurist with high quality and high product power as soon as possible after receipt of the funds contemplated by these financings,” said Xuefeng (XF) Chen, Global CEO of Faraday Future.
The February round of financing was in addition to $33.4 million raised by Faraday since the middle of last December to fund production costs for the FF 91.
A history of delays
Faraday previously delayed production — multiple times — due to a lack of capital. Faraday said it was getting ready to begin production in 2020, but that never happened. Then the company planned to begin production in 2021 with a $1 billion investment, but only unveiled the pre-production model of the FF 91 early in 2022. By mid-year, the company admitted that its much-touted 14,000 pre-orders were in fact only 401 actual orders.
The company needed money again in the summer of 2022, and changed out its top executives amid allegations of mismanagement in September. In November, the company secured $350 million in new funding, and worked to cut its burn rate while getting no closer to actual production. Faraday’s former CEO Carsten Breitfeld was replaced by as Global CEO by the company’s China Chief Executive Xuefeng Chen towards the end of last year.
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- Source: https://www.thedetroitbureau.com/2023/04/faraday-future-delays-deliveries-seeks-more-cash/
