Faraday Future, an electric vehicle startup listed on the US stock market, FF) announced on Tuesday local time that due to current market conditions and funding levels, the company has withdrawn its previously released production forecast for 2024. The company's stock price plummeted by over 21% in post market trading after the announcement of this news.
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.
FF had predicted in November last year that it would produce approximately 1000 cars by 2024. However, due to funding shortages and unstable market conditions, the company is now seeking additional strategic investors to support its future growth, and exploring financing methods supported by equipment and intellectual property to reduce reliance on diluted funds.
FF is still deeply trapped in a severe financial crisis - data shows that as of May 23rd, the company's cash balance was only $5 million. Last December, FF's cash balance is $17 million.
According to a statement released by FF, the company achieved its first-ever revenue generation in fiscal year 2023, with revenue of $800000. At the same time, the company's commodity costs reached $43 million, with an operating loss of up to $286 million.
This number has improved from $437 million in 2022. Mainly due to a significant reduction in operating expenses, including a decrease in research and development expenses, as the company has already completed the product development phase.
As of December 31, 2023, Faraday's total assets were $531 million, which is basically the same as the previous year. Total liabilities decreased to $302 million, and cash outflows from operating activities also decreased. Capital expenditure has significantly decreased to $31 million, far below the previous year's $123 million.
Matthias Aydt, Co CEO of FF, stated that 2023 is a milestone year for FF as the company successfully shifts towards a growth phase focused on production and revenue generation. He hopes that FF can continue to pursue growth by improving efficiency and expanding into new markets.
Previously, FF was warned by the Nasdaq Stock Exchange due to its failure to submit its quarterly report as of March 31 in a timely manner, which may result in its delisting. The company previously received a delisting notice due to failing to meet the minimum closing stock price requirement of $1 set by NASDAQ, but its stock price has risen by nearly 70% so far this year, and its current price has exceeded the minimum delisting standard of $1.
FF founder Jia Yueting recently stated on social media that despite facing various challenges, Nasdaq has approved Faraday's application to continue trading in the future, demonstrating market recognition of FF's future prospects.
Currently, FF did not provide further public explanation for Jia Yueting's statement this time.
On May 15th, Jia Yueting also made a public speech through a video, proposing that FF can serve as a bridge to help Chinese automotive companies and supply chains quickly enter the US market. He emphasized that this strategy can significantly reduce the trial and error and time costs for Chinese companies in the US market, and expressed the desire to cooperate with Chinese automotive companies to jointly develop competitive large-scale production models in the US market.
Jia Yueting reiterated this point in the video announcing Nasdaq's approval of the transaction and announced that FF will release a plan called "FF China US Automotive Industry Bridge Strategy" in a month. This strategy aims to transform the $300000 FF 91 core technology into a wider range of Volkswagen models.
It should be noted that the Office of the United States Trade Representative (USTR) announced on May 22 local time that starting from August 1, significant tariffs will be imposed on a series of Chinese imported goods, including electric vehicles and their batteries, computer chips, and medical products. This policy adjustment will increase the tariffs on Chinese electric vehicles entering the United States to four times the previous level.