AutoBeta(AutoBeta.net)07/23 Report--

Faraday's future share price triggered a circuit breaker at 09:38 EDT, falling 36.95%, before resuming trading at 09:43. As of the close of the day, Faraday's future shares fell 23.75% to close at $2.60, with a total market capitalization of $786 million. According to the "Tramway report" statistics, Faraday fell sharply in the next five trading days this week, with a cumulative decline of 65.43%.

Since June 29, Faraday's future share price has soared, from a low of $2.20 to a peak of $7.85, an increase of 199.11%. Market news believes that Faraday's future share price rise is due to the imminent mass production of its first model. FF 91 is scheduled to begin mass production in the third quarter of this year and is expected to produce 6000 to 8000 vehicles in 2023. Faraday Future Global CEO Bifukang said that the company will adopt a "hybrid production strategy" in car production, FF91 crossovers will be produced at its plant in Hanford, California, while FF 81 models in the mass market will be produced by South Korean car contractor MyoungShin.

The FF 91, the first model under Faraday's future, is a luxury electric vehicle priced at more than $100000, with the Maybach S-Class, Porsche Taycan and BMW 7-Series as competitors of the FF 91. However, the mass production of the car is difficult and tortuous, and since its release in 2017, there have been numerous rumors of broken funds, dismissal of employees, huge debts and so on.

On the morning of July 22nd, US time, Faraday Future officially listed on the NASDAQ Stock Exchange and held a bell-ringing ceremony to begin official public trading under the stock symbol "FFIE". The offering price of FFIE was $13.78 and closed 1.45% higher on the first day, closing at $13.98, with a total market capitalization of $4.535 billion. However, by the close of the latest day, Faraday's shares had fallen 81.13% to close at $2.60.

On the day Faraday landed on NASDAQ in the future, founder Jia Yueting said in an interview that "we will go all out to achieve 12-month mass production and have great confidence in on-time production with FF 91." Now, as that time approaches, officials have once again changed their view from "July" to "third quarter", which means that FF 91 may be delayed to September, with only the last month left in the third quarter.

The market believes that Faraday's share price will continue to plummet in the future and is likely to be disappointed by FF 91's mass production plan. In October, J Capital Research, a US investment firm, released a 28-page short report that included questions about Faraday's future R & D investment, production capacity, capital performance and founder Jia Yueting himself, believing that the company could not sell a single car. In April, Faraday announced that the company had taken more disciplinary actions as part of a closed internal investigation, including the dismissal of Jia Yueting, its founder and former CEO, as an executive.

The mass production of FF 91 is particularly important for Faraday's future, and whether it can be successfully delivered is related to whether it can avoid bankruptcy. Previously, Bi Fukang, chief executive of FF, said in an interview that FF could launch FF91 without additional capital, while the company also said that it would start production in China in the future, and that negotiations were at an early stage. Earlier, Faraday announced a partnership with Geely in the future, but there has been no progress over the past year.

At the same time, since Jia Yueting abandoned Letv and went to the United States to pursue the car dream, it seems that the word "lack of money" has closely followed Jia Yueting, and in order to solve the financial problem, Jia Yueting also found Xu Jiayin of Evergrande, and even in order to solve the debt crisis, he finally sold all his equity to all creditors in the form of personal bankruptcy, but so far, none of these has solved the fundamental problem.

At present, Faraday's future financial situation is not optimistic. According to Faraday's future filings with the Securities and Exchange Commission (SEC), the company made a net loss of $142 million, $147 million and $517 million, respectively, from 2019 to 2021, and a net loss of $153 million in the first quarter of 2022, compared with a net loss of about $76 million in the same period last year. "the company is expected to continue to generate significant operating losses for the foreseeable future and will continue to incur expenses until material revenue is generated," FF said in its quarterly report. At the end of the first quarter, FF had only $277 million in paper cash and cash equivalents, with total assets of about $706 million. At the current rate of "burning money", FF may not last until the fourth quarter of this year, and mass production of FF 91 will determine whether Faraday will be able to tell the next episode in the future.

Jia Yueting and Xu Jiayin once worked together to build cars, but later broke up in discord. Now Xu Jiayin's first model has been pre-sold. As of 18:04 on July 20, the number of pre-sale orders for Hengchi 5 has reached 37000. Liu Yongzhao, president of Hengchi New Energy Automobile Group, said bluntly in an interview that "big sales are a foregone conclusion." Jia Yueting and Ding Lei built cars together. Jia Yueting later left the United States, while Ding Lei founded Gaohe and mass-produced its first model, the HiPhi X, with cumulative sales of 4237 vehicles in 2021 and 2584 in the first half of 2022. Just for now, Jia Yueting is the worst one.

FF said that as of the end of the first quarter, the number of FF91 bookings was 401, and it will make every effort to promote the mass production delivery of the first model, the FF91, in the third quarter. It should be noted that mass production and delivery are two different things. In the long history of automobiles, there are numerous cases of suspension of production and bankruptcy of car companies due to too high cost and too little output. Of course, according to FF91 pricing, more or less sales may not be the most important. For Faraday's future, the deeper significance of FF91 mass production is to let investors have confidence in Faraday's future and let the market see hope for survival. However, if FF91 underperforms in the market, what should investors think of Faraday's future?

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