Written by Cláudio Afonso | LinkedIn | X
In reaction to a tumble that reached 40 percent during pre-market trading on early Wednesday, the electric vehicle maker Faraday Future issued a new statement saying it will provide a strategic updated “in the next month or two”.
Additionally, Faraday said it had “preliminary discussions with several global OEMs and suppliers” on how the company can “help build a bridge between US and Chinese automotive industries through industrial coordination and collaboration”.
Shares of the EV startup closed 0.86 percent higher on Tuesday at $1.17 and are currently trading 32 percent lower at $0.78 in pre-market following the release of the financial results.
The company is expecting to provide additional details on the “US-China Automotive Industry Bridge Strategy” which reflects an adjusted corporate strategy by returning to the earlier two-brand setup to distinguish market segments.
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Faraday admitted that the move will enable the integration of FF’s high value “Ultimate AI TechLuxury” solutions and features of its I.A.I technology into vehicles in a more affordable mass market product segments.
“As part of FF’s dual-home-market strategy, FF could leverage its unique bridge value to integrate the strengths of the US automotive industry with those of Chinese car companies and the respective supply chains,” the company stated.
During the earnings conference call last night, the company did not take any questions from analysts besides the common opening remarks from the management.
The California-based startup published on Tuesday its fourth quarter and full year financial results disclosing that it is withdrawing its production target guidance for 2024.
The company stated that the reason for the decision is the “current market conditions and current levels of funding the company”. In the previous financial update last November, the company said it expected to produce about 1,000 vehicles this year.
As cash reserves risk the future of the EV startup, Faraday Future said that it “continues to pursue additional significant strategic investors”.
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“To support future growth the Company continues to pursue additional significant strategic investors to support future growth. It also is considering equipment- and IP-backed financing to potentially reduce reliance on dilutive funding,” the startup said.
“The Company does not plan to issue additional shares unless and until the Company receives shareholder approval to increase total authorized share count,” Faraday Future added.
The company disclosed a total of four FF91 EV vehicles sold and six leased for the full year of 2023. The startup recorded a revenue of $0.784 million in that period.
“We began the production of our FF 91 Futurist in March 2023 and started making deliveries to customers in August 2023 and have sold four and leased six vehicles for the year ended December 31, 2023,” the company stated.
“Automotive sales revenue was $0.8 million for the year ended December 31, 2023. We started vehicle delivery to our customers during the third quarter of 2023 and this amount is primarily driven by the four cars that were sold through December 31, 2023. There was no sales revenue for the year ended December 31, 2022,” the company stated.
Research and development expenses in 2023 were $132 million substantially lower than nearly $300 million in the previous year. The company justified the decrease by saying that the reduction is primarily related less activities around engineering, design, and testing services as they were completed in 2022.
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“The decrease in R&D expense is primarily due to the reduction in engineering, design, and testing services of $125.9 million as we substantially completed R&D activities related to the FF 91 Futurist vehicle in 2022,” the startup explained.
The company announced on Tuesday that Nasdaq granted an extended stay of the suspension pending a hearing with Nasdaq’s Hearings Panel.
The company has been confronting the possibility of being delisted from Nasdaq due to ongoing non-compliance with several key listing requirements. Over the past six months, the company has received multiple notifications from Nasdaq, highlighting critical issues that threaten its status on the exchange.
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Written by Cláudio Afonso | LinkedIn | X
