Embattled EV maker Faraday Future is once again seeking an infusion of cash.
The company is seeking $150 million to $170 million to begin production of the oft-delayed FF 91 Futurist, according to a Reuters report. The company has been strapped for cash and seeking additional money regularly during the past several years.
Lots of money, but no cars
In 2019, the company found new money from Chinese video game maker The9 Limited, and then from Birch Lake Fund Management LP. 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.
At that time, Faraday’s Global CEO Carsten Breitfeld stated, “We have completed important funding agreements and are optimistic that we can put in place the additional funding we need to launch the FF 91. With that momentum, we are currently developing revised budgets and production plans, and hope to be in a position to announce the timing of delivering the FF 91 to users shortly after funding is secured.”
Breitfeld was asked to resign later in November, and was replaced as Global CEO by the company’s China Chief Executive Xuefeng Chen.
Now the company is in talks with investors to raise up to $170 million, with a plan to begin production of the FF 91 in March 2023, with initial customer deliveries planned for April. Reuters reports that the company secured a $30 million commitment from an existing investor, and that all the money for the latest attempt to begin production is likely to come from existing investors trying to protect their prior investments.
Conserving cash and furloughed employees
Reuters reports the company’s interim CFO Yun Han stating, “We’ve implemented a number of cash conservation measures that have significantly reduced our spending to core items that are essential to delivering the FF 91 Futurist.”
Among those cash conservation efforts, the company has furloughed some employees, dodging the pessimistic appearance of another round of layoffs while shaving monthly expenses.
Faraday’s stock price dropped another 21% late last week and is now down over 90% for the year to $0.31 per share. That price represents an additional 11.26% drop as of mid-day Monday.
It remains to be seen if this latest round of money will finally get Faraday’s vehicle into production. However, even if the FF 91 begins production, buyers are likely to be reluctant to sink the $180,000 starting price into a vehicle that may become an orphan at any moment. At the moment, even the $1,500 deposit required to pre-order the FF 91 Futurist seems like a risky bet.