AutoBeta(AutoBeta.net)08/15 Report--

Faraday Future (FF) released its financial results for the second quarter of 2024 on August 15, Beijing time. FF's operating expenses were $29.9 million (214 million yuan) in the second quarter, down from $49.4 million in the same period last year, and an operating loss of $50.6 million (361 million yuan), down from $56 million in the same period last year, according to the data.

In the second quarter, FF raised about $15.5 million through convertible bond financing, but FF is still short of money. Cash used for FF's operating activities was $29.1 million as of June 30, down significantly from $160.7 million in the same period last year, with total book assets of $457.9 million, liabilities of $309.2 million and net assets of $148.7 million, according to the results.

FF said that in the second quarter, FF cost control achieved remarkable results, production and manufacturing costs were significantly reduced, and FF costs are expected to continue to reduce year-on-year during the year. According to the current business needs and financial situation, the company has made reasonable adjustments to the operation and staff size, and the follow-up FF will continue to promote production and vehicle delivery.

Looking back on the process of building FF cars, Jia Yueting founded FF in May 2014. it has been 10 years since FF built cars, but FF has never been able to produce on a large scale and has not been separated from the fate of lack of money.

As one of the earliest new car-building forces, FF has spent a lot of money in building cars over the past 10 years, but it has only one model, the FF91. To make matters worse, there is no market for the new car after its launch, with only 13 new cars delivered so far, of which 10 were delivered in 2023, while the 13th new car was delivered on Aug. 13, owned by Gao Wei, a senior FF employee and head of global communications and community sales. In other words, FF has delivered only three new cars so far this year.

From the point of view of the launch and delivery of new cars, FF has delivered only 13 new cars for 10 years, which is essentially not much different from "PPT". As a contrast, Xiaomi has only taken about 3 years from the announcement to the launch of the first mass production model, and it has delivered more than 10,000 cars every month for two consecutive months.

In addition to bottoming out, FF also faces quality problems and is not favored by the capital markets. In March this year, FF filed a recall plan with NHTSA, recalling all the vehicles delivered and a FF 91 2.0 owned by Jia Yueting, a total of 11 vehicles, due to airbag warning lights problems; at the capital market level, FF is not optimistic. In April, FF announced that it had received a letter of delisting warning from the Nasdaq Stock Exchange because the company closed at 10 cents or less for 10 consecutive trading days. The following June, FF announced that it would continue to list on NASDAQ. It should be noted that although FF remains on the Nasdaq "card table", its funding problem has not been solved, which is also a difficult problem that FF hinders the production and delivery of new cars.

However, even though the quantity delivered by FF is small, Jia Yueting, who "suffocates for his dream", still believes in his dream of building a car. "FF is considering launching a second brand under the 'China-US Automotive Industry Bridge Strategy', which will empower FF's high-value solutions and functions to Volkswagen in the future, so that more individual investor users can enjoy our smart technology luxury," Jia said on June 13. On July 31, Jia Yueting further explained that if you want to be a second brand, you will choose to be the tower base market or even the tower waist market, and pointed out that if you want to compete, you must first improve your own cost control ability, and at the same time, you have to use an innovative model. The biggest worry is not whether it can be done or not, but how to compete with traditional manufacturers.

With the strengthening of the transformation from traditional car enterprises to new energy vehicles and the accelerated rise of more new power car companies, the competition in the car market is also more intense, at the same time, consumers' choice of models is also more diversified. In this context, it is almost impossible for FF to rely on the FF91 to succeed. At present, "how to promote delivery climbing faster" is the top priority of FF, but the industry believes that mass production of FF is so difficult, and large-scale delivery is even more difficult.

It is worth mentioning that when talking about building cars this time, Jia Yueting pointed out that FF will not compete with BYD, but will focus on the United States and other markets to compete with car companies including GM, Ford, Mercedes-Benz, BMW and Volkswagen, especially the low-end products launched by Volkswagen. In his view, the automobile industry is not a strong network effect industry, the brand concentration of the automobile industry will be higher and higher, but not too little, at least the United States can tolerate the next five brands, the FF will be 1/5.

Or affected by the earnings announcement, FF shares closed at $0.168, down 12.50%, with a total market capitalization of $74.13 million.

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