Faraday Future is on track to start production of FF 91 this month if funds arrive

Faraday Future on Wednesday announced plans to start production of its futuristic all-electric FF 91 SUV in late March after years of delays, lack of capital and internal dramas that threatened the company’s existence.

Faraday Future previously indicated that production would begin in March, but had not yet chosen a date.

There are, however, two caveats to this step. The company said in its full-year and fourth-quarter earnings report that the start of production will begin on March 30 if it receives the remaining funds expected from investors and suppliers are able to meet its requirements. . Faraday Future said in February it had reached financial commitments of $135 million in secured convertible bonds, capital the company said would allow it to start production. Approximately $111.6 million in funds have been received. The company expects additional payments of $38.4 and $58.4 million.

CEO Xuefeng Chen said during the company’s earnings report on Wednesday that he was confident the funds would be received. However, his fundraising days are not over. The company’s chief financial officer indicated that Faraday Future was looking to raise at least an additional $50 million.

“It has always been our plan and our expectation that we should raise additional funds to go beyond the initial launch of FF 91 Futurist,” said CFO Yun Han. “We have just started a $50 million fundraising to have better liquidity to support our production ramp and have already received signs of interest from investors for almost the entire amount.

The FF 91 will be assembled at its factory in Hanford, California. The first vehicles are expected to roll off the assembly line in early April and customer deliveries will take place before the end of this month, the company said. Chen said the company was initially targeting sales in the Los Angeles area, followed by San Francis Bay Area, And THE New york Metro region. In China, of the company initial sales efforts will be begin with Shanghai And Beijing, he said.

Shares of Faraday Future fell 8% to $0.51 per share ahead of the earnings report. The production update helped push the shares higher after hours by about 0.44% despite a rather dismal earnings report.

Faraday Future did not generate any revenue in the fourth quarter or in 2022 for that matter. Its operating expenses were $451 million in 2022, compared to $354.1 million the previous year. Faraday said that the bulk of the oOperating expenses were recorded in the first nine months of the year due to an increase in engineering, design and testing costs.

The company reported a net loss of $552.1 million for 2022, about 7% higher than the $516.5 million lost in the year-ago period. Net loss in the fourth quarter was $153.9 million, compared to $84.3 million in the same period a year ago.

Faraday Future announced that it ended the fourth quarter with $18.5 million in cash and restricted cash. The company’s cash position has improved and now stands at $37.5 million, including restricted cash of $2.1 million as of March 3, 2023.

While there are strings attached to this production start date, it still marks a turnaround for a company that just four months ago had substantial doubt as to its ability to continue its activities over the next year.

At the time, Faraday cited a number of conditions that were delaying deliveries of its FF 91, including the ability of suppliers to meet their deliverables, the timing and success of certification testing, and the implementation and efficiency company downsizing. High on the list of concerns was whether Faraday would be able to secure the funds he needed to get through the year, let alone for the first deliveries.

The company’s board ousted CEO Carsten Breitfeld a week later and named Xuefeng Chen, a longtime former Chery Jaguar Land Rover executive who recently led Faraday Future’s China division, as its new chief. .

Faraday Future has been grappling with delays and drama for years, which escalated after its July 2021 IPO via a merger with special-purpose acquisitions firm Property Solutions Acquisition Corp. In July 2022, the company pushed back its production start and first deliveries to the third and fourth quarters, citing supply chain issues and a lack of cash.