On May 31st, Jia Yueting released a clarification video regarding misunderstandings and rumors caused by the disclosure of risk warnings in the 2023 financial report.
Jia Yueting stated that "Jia Yueting and FF admit that the company will never be profitable" is completely untrue, which is a quote from our financial risk disclosure section that goes out of context or even spreads rumors. In fact, most of these risk descriptions can be traced back to the registration documents submitted to the SEC before the company went public. Since then, those risk descriptions have been used in every disclosure document, which can be found in all and past disclosure documents. These are the common practices of annual report risk warnings. It's just that the company proactively chose the strictest compliance standards and made the most extreme description of potential risks, which is not a fact that has already occurred, let alone a so-called recognition.
On the contrary, achieving profitability as soon as possible is the goal we have been pursuing. We are not only not always unable to make profits, but all employees are working hard to achieve this goal. If strategic investors are introduced as soon as possible, relying on FF's decisive five forces, coupled with unique business models such as light asset model, high brand, high gross profit, and co creation and sharing, it is possible to achieve positive operating cash flow without burning too much money.
In addition, we plan to release the FF China US automotive industry bridge strategy in one month, igniting the ten-year accumulation of the pinnacle and achieving profitability as soon as possible. Of course, the disclosure of financial reports cannot simply exaggerate risks in risk disclosure, and the integrity of information is also very important. The existing management has a responsibility to continuously enhance relevant capabilities in the future.
Regarding why the annual sales target was withdrawn in the annual report, Jia Yueting responded that the main reason was that the financing of large strategic investors had not been expected to be completed, and financial difficulties caused the inability to ramp up production capacity. If significant amounts or strategic investor financing are achieved, new sales target guidelines may be released and confidence will be gained in achieving FF 91 2.0 production, rapid ramp up sales, and delivery.
In addition, regarding the issue of whether it is true that out of the 10 cars sold by FF last year, only 4 were sold and 6 were rented out, Jia Yueting responded that this was a misunderstanding caused by lack of understanding of American car sales or inaccurate translation. In fact, FF actually delivered 10 cars last year, and the purchasing methods include full payment and lease. There are three main forms of car purchase in the United States, in addition to full payment and loan purchase, another sales method that has not yet been implemented in China is the Lease, Lease accounts for a very high proportion of new car sales in the United States, and the average proportion of luxury car brand consumers choosing to purchase a lease is over 50%. It can be said that it is the most mainstream car sales method in the United States, not just a simple rental as people imagine.
On May 28th local time, Faraday Future's official website disclosed its full year performance for 2023. The report shows that the company's annual revenue for 2023 was $800000, with an operating loss of $286 million. The operating loss in 2022 was 437 million US dollars. This change is due to a significant reduction in operating expenses, from $244 million in 2023 to $437 million in 2022. The improvement in operating expenses this year is mainly due to the company's completion of product development and transition to sales through manufacturing and production, resulting in a decrease in research and development expenses. The net loss for 2023 improved from $602 million in 2022 to $432 million.
As of December 31, 2023, Faraday's future total assets were $531 million and total liabilities were $302 million, while as of December 31, 2022, its total assets were $529 million and total liabilities were $328 million.
As of December 31, 2023, Faraday's future cash balance was $4 million, including $2 million in restricted cash. By contrast, as of December 31, 2022, cash was $17 million. As of May 23, 2024, the company's cash position was approximately $5 million, including $2 million in restricted cash.
FF pointed out in the report that the company may encounter various unpredictable costs and complex situations during the delivery process of FF 91 series products, and may even face delays, which may hinder the company from generating sufficient revenue to maintain daily operations.
Although Faraday has started delivering FF 91 products in the future, the demand for this model and related services is insufficient, coupled with pressure from vehicle service and warranty costs, intensified market competition, deterioration of macroeconomic environment, changes in regulatory environment, and other risk factors, the company may continue to suffer huge losses and may never be able to achieve and maintain profitability.