AutoBeta(AutoBeta.net)09/13 Report--

According to several media reports, Faraday Future (hereinafter referred to as "FF") filed with the Securities and Exchange Commission on Sept. 10 local time shows that FF will raise its founder and CEO Jia Yueting's salary from $450000 to $680000 (about 4.83 million yuan), an increase of more than 50%. The pay rise will also be accompanied by CEO Matthias Aydt, whose annual base salary will rise from $400000 to $700000 (about 5 million yuan). In addition, Jia Yueting also received an one-time recognition bonus of $500000, an annual discretionary target bonus of $816000 and two annual stock awards with a total value of more than $4 million, the report said.

It is worth mentioning that the current situation of FF is not optimistic. FF reported revenue of $295000 in the first half and a net loss of $157 million (1.1 billion yuan). Cash used for FF's operating activities as of June 30 was $29.1 million, down significantly from $160.7 million in the same period last year; total book assets were $457.9 million; total liabilities were $309.2 million; and net assets were $148.7 million.

In this context, FF generously offered such generous salaries and bonuses to two executives also attracted attention. It is understood that FF raised the salaries of the two executives because FF has received 30 million dollars in financing commitments from investors in the Middle East, the United States and Asia. When the news was announced on Sept. 6, FF Global CEO Matthias Aydt said: "this new funding will open up more possibilities for FF, including supporting our ongoing production of FF 91 2.0 and strengthening product and software updates."

It should be noted that the salary increase and bonus will not be received in the short term, and Jia Yueting will get the rest of the raise only when FF resumes the full salary of all its employees. At present, Jia Yueting is also in a state of pay cut, and FF said it will continue to implement cost-cutting measures to increase efficiency. The vast majority of executives and employees, including Jia Yueting and Matthias, have reduced their actual salaries and failed to get full pay.

As one of the first new car-building forces to enter the game, FF car-building began in May 2014, when Jia Yueting founded FF, but now 10 years after FF car-building, FF has never been able to mass production and has not escaped from the fate of lack of money. The car has spent a lot of money 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.

Nearly 10 years of car building, Jia Yueting's heroic words about car building are still fresh in his mind, but since the car was built, FF's financial situation has been very tight, facing cash flow crises many times, and now it is heavily in debt, and has even been sued by the landlord for defaulting huge rents. But in spite of this, Jia Yueting, who "suffocated for his dream", still believes in his dream of building a car. Jia Yueting has recently released frequent videos announcing that the "FF China-US Automobile Industry Bridge Strategy and second Brand Conference" is scheduled to be held on Sept. 19. Earlier, when talking about building cars, Jia Yueting pointed out that FF will not compete with BYD, but will focus on the United States and other markets, competing with automakers including GM, Ford, Mercedes-Benz, BMW and Volkswagen, especially 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.

What needs to be faced squarely is that with the strengthening of the transformation from traditional car enterprises to new energy vehicles and the accelerated rise of more new power car enterprises, the competition in the automobile market is also more intense. At present, the mass production of FF is difficult, and it is even more difficult to deliver on a large scale. in this context, no one can give a definite answer to how far FF can go.

As of Sept. 12, FF shares closed at $4.04 per share, up 1.51%, with a total market capitalization of $50.02 million.

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