AutoBeta(AutoBeta.net)10/08 Report--

On October 7th, J Capital Research, an American short seller, released a 28-page short selling report on FF. It said that it did not think FF could sell a car through site visits, analysis of FF's financial data, technical capabilities, R & D investment, and a series of capital operations after listing.

At the same time, the report also pointed out that FF has not fulfilled its commitment to build plants in five locations in the United States and China, and has repeatedly delayed the construction of a sixth plant. The agency said it visited FF's Hanford plant in California three times between August and September and found that the plant had not started production, which was not consistent with what FF called "progress in manufacturing" in its September report. J Capital Research called FF an "emerging electric car scam". In addition, J Capital Research pointed out that according to FF's own disclosure documents, the company will need an additional $1.4 billion in cash to meet its financial targets by 2024, which could lead to further dilution of investors' holdings after large-scale fund-raising and debt-equity swaps. J Capital Research questioned whether anyone would be willing to continue lending to the company. In response to J Capital Research's short selling report, FF Jia Yueting said: "Hot fried cold rice, nonsense", and reminded J Capital Research that "this is not the first time I have been hit in the face." People related to FF also said that the report is full of misleading information, lack of logic and no factual basis. FF expressed disappointment and condemnation of the agency's irresponsible actions and reserved the right of legal prosecution for such false allegations.

It is understood that on July 22 this year, FF Faraday will be listed on NASDAQ in the United States through a special purpose acquisition company (SPAC) under the stock code FFIE. The offering price was US $13.78 / ADS and opened at US $16.8 / ADS, up 22% from the offering price, with a total market capitalization of US $5.4 billion. Jia Yueting, founder of FF, said in an interview after listing: "the listing of FF is a new starting point, which solves the biggest funding problem, and then goes all out to achieve mass production and delivery in 12 months."

It is worth noting that although Jia Yueting FF Company was shorted, there has been a lot of good news from FF officials recently. On October 7th, Faraday Future announced that the DR automotive XLMAIER group is the main supplier of the central console for the interior decoration of the flagship FF 91. Vanguard, the world's largest public offering fund, bought a total of 539000 shares, making it the fifth largest shareholder of FF, according to people related to FF on September 22nd. On September 19th, the cooperation between FF official Xuan and Geely Holdings made substantial progress at the "919th Futurist Co-creation Festival" held by FF. In addition, it also said that the first flagship stores of FF 91 in China will be located in Beijing, Shanghai, Guangzhou and Shenzhen. On August 25th, according to media reports, French cars owned by FF are already working in the joint office space in Zhuhai. The head of FF Zhuhai said: FF has sufficient working capital after listing and financing, and the cooperation with local state-owned assets is continuing, and FF will operate in many Chinese cities in the future. On August 20th, FF announced that it planned to greatly expand the number of employees to achieve mass production in the next 12 months, moving towards the goal of delivering FF91 in 2022.

In addition, according to the Faraday Future website, the global limited edition of the FF91 "futurist Alliance" has been sold out. Chen Xuefeng, CEO of FF China, has revealed that FF91 has received more than 400 orders in China, and the limited edition of FF91 Futurist Alliance Edition under the invitation system has been sold out worldwide. The target of FF 91 is Maybach and Mercedes-Benz S-Class, and the sales goal is to achieve the first place in the spire market segment. The Chinese market will account for 70 per cent of FF 91 sales. It is understood that Faraday has planned three models of FF91, FF81 and FF71 in the future, of which the FF91 is the most high-end, with an expected starting price of $100000 and is expected to be launched a year later. Aimed at the upmarket mass market, FF81 is expected to start mass production 18 months after the launch of the FF91, with a target starting price of $59000. The third model, the FF71, which is aimed at the mass market, is expected to be designed and developed in 2022, with a starting price of $45000.

It is not difficult to see that the mass production of FF 91 has also become a key step for FF to build cars. According to Faraday's future global CEO Bifukang earlier, FF is expected to occupy 3% of the luxury car market, with sales of FF 91 reaching 40, 000 in the next two years and 270000 in five years. However, FF faces far less opportunities than it seems. After all, it takes a lot of money to build a car, but FF91's mass production is still on its way. According to the relevant data, the cumulative loss of FF has reached $2.39 billion by the end of 2020, and the net loss of FF in 2019 and 2020 is $142 million and $147 million respectively. In addition, FF's cash flow is not optimistic, with working capital of-$688 million in 2019 and-$835 million in 2020.

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