Faraday Future said that the FF91 will be delivered in the third quarter of this year, with the FF81 coming into production in 2024 and predicting a profitable performance in 2025. Will you still jump tickets this time?
Author | Pan Tao Edited | Yu Huiru
Faraday Future (FF) has finally ushered in good news after experiencing delisting warnings and FF91 order data fraud storms.
On February 24, Beijing time, FF's Hanford plant in California, USA, unveiled the first quasi-production vehicle of its FF91 to the world.
At the scene, Jia Yueting could not help but sigh that the completion of this quasi-production car opened a new chapter in FF and the Hanford factory, "The dream we are fighting for is getting closer and closer to us and has become a reality." ”
Event Site Source: FF
FF 91 has been difficult to give birth for a long time, and Jia Yueting has also suffered from trust bankruptcy crises many times. However, the appearance of the FF91 quasi-car did not buy much praise for it.
The planned one-hour live broadcast on the morning of February 24 lasted only 25 minutes, and the specific parameters, price and delivery date of FF91 were not disclosed. Some netizens do not buy the process of FF, ridiculing FF "What about Nezha? However, many netizens still expressed their support.
Despite the good news that the quasi-production car is off the production line, FF's stock price is not "appreciative". On the 23rd, after the news of the completion of the first quasi-production car was announced, FF rose more than 7% before the market, but the day finally closed down 6.32%, $4.74 / share.
However, in FF's own view, the roll-off of the car marks the realization of its fourth key milestone in production and manufacturing, which is the final verification and compliance test before the mass production delivery.
FF said at the event that FF91 will be delivered in the third quarter of this year, put into production FF81 in 2024, and start making a profit in 2025. In the coming months, FF will continue to manufacture more quasi-production vehicles for final engineering verification and certification work.
Jia Yueting's foot in the door, finally to finish?
1
The first quasi-production vehicle rolled off the production line
Before the event began, FF first warmed up and showed the situation at the Hanford plant. At present, the Hanford plant has introduced some equipment, such as the drying furnace in the spraying workshop. However, the factory has not yet built a complete production line, and many equipment has not yet been returned.
Hanford Factory Source: Screenshot of live broadcast
At the event site, FF CEO Bi Fukang and CPUO Jia Yueting drove on the FF91. "Our first car was right behind me and it was a very exciting thing." Bi Fukang said.
In terms of appearance, this car has more than 5 meters 2 long and 3 meters 2 wheelbase. It has an endurance of more than 300 miles (about 483 kilometers).
FF did not announce specific changes and more parameters about the vehicle, but the sensor layout can be seen through the appearance. According to Bi Fukang, the new version updates the headlights and rear lights, lidar, and front and rear storage boxes, and also has new livery. However, most of the components on future production cars are roughly the same compared to the first quasi-production car, and various tests will be carried out in the coming months.
The car is committed to taking the high-end route, but at the off-line ceremony, FF did not disclose the specific price, listing date, and delivery date of the car. However, Bi Fukang said that the price of this car will be higher than 200,000 US dollars (about 1.26 million yuan), and if imported into China, the price may be as high as 2 million yuan.
According to previously released information, the FF91 is FF's first mass production car and flagship model, which is divided into three versions: FF91 Futurist Alliance Edition, FF91 Futurist, and FF91. Equipped with three electric motors, the FF91 can produce 1050 horsepower and accelerate from 0-96km/h in only 2. For 39 seconds, the battery lasts more than 700 km/ h.
Last July, FF announced that 300 FF91 Futurist Alliance Editions had been fully booked.
At the event site, Jia Yueting did not hesitate to praise the car: "The 100 km/h acceleration of the FF91 is one of the fastest in the Ev industry, far surpassing the Maybach, and at the same time faster than most Ferrari models." ”
Jia Yueting Source: Screenshot of live broadcast
At the same time, he once again mentioned himself and FF's "ambition" - "We want to achieve the subversion of traditional luxury car brands." ”
Jia Yueting said that the next key task of FF is to hand over FF91 to the hands of global spire users and achieve the first position in the global spire market industry. "This is the goal of the first phase of FF."
Source: Screenshot of Jia Yueting's Weibo
Bi Fukang revealed at the event that FF recently signed an agreement with the Gunsan plant in South Korea to ensure that FF will put into production FF81 in 2024 and start making a profit in 2025.
In his view, FF's hybrid model and asset-light model, including leasing the FF91 factory in Hanford and producing FF81 in South Korea, will become the focus of FF's future growth.
For the Hanford plant, FF will hire more than 350 new employees before ramping up production this year.
FF's theme for the event was "Born in California.Global DNA" with good intentions.
Jia Yueting explained at the scene that Born in California represents the product definition of FF91, including product design completed at the los Angeles headquarters in California, all engineering and testing completed in Los Angeles and Silicon Valley, and the manufacturing base is located in Hanford, California; Global DNA, which refers to the fact that FF gathers global talents, including offices in the United States, Los Angeles, Silicon Valley, Beijing, Shanghai, Chengdu and other places. Supported by top global suppliers to produce and deliver FF91s.
From its initial debut to today's first quasi-production car rolling off the production line, the FF91 has gone through five years. In recent years, the data released by FF shows that FF91 has been "released" at least three times during the 5-year period.
In January 2017, the FF91 debuted at CES in Las Vegas, USA, when Jia Yueting expressed confidence in mass production in 2018; but in August 2018, the audience waited for only the first "pre-production car" of the FF91 to roll off the production line.
In December 2021, FF released FF Progress on its official WeChat public account, saying that it has completed the third "milestone" - that is, the launch of infrastructure construction in the remaining production areas, including body workshops, powertrain workshops, warehouses and final assembly workshops. The fourth "milestone" is the mass production of Pre-production vehicles for final engineering verification and certification. In the video, FF employees say that the current Pre-production vehicle is 30% complete.
2
Dream & Paint Cake
Jia Yueting's road to car building can be described as a twist and turn.
In July last year, FF successfully landed on the NASDAQ through a reverse merger with Property Solutions Acquisition Corp. (PSAC).
FF successfully listed on a backdoor listing, allowing Jia Yueting to alleviate the problem of funds for a time. Under the mutual agreement, PSAC will provide FF with approximately $1 billion in funds (including $230 million in cash held by PSAC in trust on non-redemption terms).
For FF, who is anxious to use money to "mass production", the arrival of this fund is tantamount to sending charcoal in the snow, and Jia Yueting's "return to China next week" seems to be realized. On the day of the listing, he posted in the circle of friends, saying that he wanted to "achieve the subversion of traditional ultra-luxury car brands such as Maybach, Ferrari and Bentley".
The funds raised from the listing have indeed promoted the development process of FF.
Just a month after landing on NASDAQ, FF announced the opening of a global recruitment effort involving manufacturing, engineering, supply chain, design, marketing, branding, sales and other positions, as well as potentially high-level management positions. At the same time as recruiting, FF also announced that FF 91 completed road tests across U.S. Route 66.
On September 19 of the same year, at the annual event of "919 Futurism Day" jointly organized by the headquarters in Los Angeles, USA and Beijing, China, FF once again introduced the company's progress and revealed the FF 91 Futurist delivery plan.
At the event, Chen Xuefeng, CEO of FF China, which is mainly responsible for the landing of car-related projects, production strategies, user construction and other businesses, said that the large-scale recruitment of production and technical support personnel, as well as the joining of Matt Tall, vice president of production and manufacturing, will accelerate the realization of the company's commitment to mass production and delivery of FF 91 within 12 months after listing.
FF91 offline Source: FF
In addition, FF is also laying out and improving its sales channels. "At present, FF has created an O2O direct sales model that integrates online and offline, and formed an asset-light sales network through online platforms, FF's own stores, partners' own stores and showrooms. Our site selection of FF ecological flagship stores has been completed, and the first batch has been determined in Beijing, Shanghai, Guangzhou and Shenzhen. ”
However, the capital market has not given enough face to FF. After the end of the "919 Futurist Day", its stock price did not rise but fell.
Two days after the event, Jia Yueting wrote on his personal social media: After dozens of voting by real users, shareholders and FPO, in the comparison of the three major areas of "performance, luxury and technology", FF 91 defeated Mercedes-Benz S Maybach, Rolls-Royce Cullinan and Lamborghini Bison.
At the same time, he also said that he should go all out to hand over FF 91 to the hands of global spire users on time, high quality and high product strength, realize the subversion of traditional ultra-luxury car brands such as Maybach, Ferrari and Bentley, and achieve the first place in the global spire market.
However, less than 20 days after Jia Yueting's "ambition" was released, a short report from J Capital Research gave him a "head start".
The short report bluntly said, "I don't think FF can sell even one car." The report not only pointed out the many financial problems that existed in FF, but also targeted the FF 91 order and the Hanford plant.
In the previous IPO announcement, FF said that its Hanford plant was under construction, but J Capital found through visits that the factory not only showed no signs of hot production, but was silent. In fact, before the Hanford factory, FF had planned 5 factories, but in the end, they were not implemented.
The report said that 78% of the 14,000 orders claimed by FF came from the same company, which is likely to be a subsidiary of FF, and these orders were converted into notes payable at an annual rate of 8% as early as 2020.
Jia Yueting once again fell into a crisis of trust, and in his circle of friends, he angrily denounced the agency as "cold rice and hot speculation, nonsense", and said that the other party was not the first time to be "punched in the face".
But in the end, it was FF and Jia Yueting himself who were "punched in the face".
FF subsequently set up a special committee of independent directors to investigate the allegations in the short-selling report. The findings of the survey led to four conclusions: after the merger of FF and PSAC, the statements made by employees of certain companies describing Jia Yueting's role within the company to certain investors were inaccurate; the number of bookings for FF91 vehicles claimed by FF before the business merger was misleading; FF's internal controls over financial accounting and reporting required upgrading of personnel and systems; and FF's corporate culture failed to pay sufficient attention to compliance.
This shows that the falsification of FF91 order data has been confirmed.
Based on the results of the investigation, FF immediately launched a series of rectifications, including the appointment of Susan Swenson, the independent director of the board, as the executive chairman of the board; the company's CEO Bi Fukang, founder and chief product and user ecosystem officer Jia Yueting, both of whom cut salaries by 25% and reported directly to Susan Swenson; and Wang Jiawei, vice president of FF's global capital markets, who is Jia Yueting's nephew, was suspended.
The constant turmoil has left questions about whether FF can be mass-produced again.
With all this, FF's life in the capital market is not good, and investors' confidence in FF seems to have been lost. On the first day of listing, FF's market capitalization was $5.314 billion. According to Wind data, the current market value of FF is $1.537 billion. In the seven months of listing, the total market value has evaporated by more than 70%.
3
Can mass production be carried out as scheduled?
After being bound to the old terrier of "returning to China next week", Jia Yueting's character has been questioned. In April last year, the Beijing Securities Regulatory Bureau unveiled a 10-year-old financial scam involving Jia Yueting's LeTV.
According to the investigation, from 2007 to 2016, LeTV carried out financial fraud for ten consecutive years. For example, there are false records in the annual reports from 2010 to 2016, and the non-public issuance of shares in 2016 constitutes a fraudulent issuance.
In this regard, LeTV was fined 240 million yuan, and in fact, the controller Jia Yueting was also fined 241 million yuan.
The FF91 order data fraud was confirmed to undoubtedly make Jia Yueting fall into a crisis of trust again.
Many people believe that whether it is its previous promise to deliver FF 91 on time and with high quality, or its promise to "subvert traditional ultra-luxury car brands such as Maybach, Ferrari and Bentley", it is "painting cake" for the market and investors. In their view, Jia Yueting's "FF91 delivery on schedule" is as unreliable as his own repeated mention of "returning to China next week".
In addition to the crisis of "investor and market trust", financial problems have always plagued Jia Yueting.
Although the backdoor listing was successful and about $1 billion was obtained, for FF, which not only recruited employees on a large scale, laid out and improved sales channels, promoted factory construction, but also ensured mass production, this money can be described as a "cup of water".
According to PSAC's previously disclosed documents, as of March 31, 2021, FF had only $47.525 million in cash on its books, which was after PSAC provided $100 million in debt financing. To make matters worse, cash at the end of 2020 was even $1.124 million.
The listing financing improved FF's financial situation, but its losses could not be quickly reversed. In Q1, 2019, 2020 and 2021, FF made net losses of $142 million, $147 million and $75.525 million, respectively.
At the end of 2021, FF disclosed its financial position for the first time after listing. FF said that since its inception, the company has generated accumulated losses due to operations and negative cash flow due to operating activities, and it expects the company to have a cumulative loss of about $2.8 billion as of September 30, 2021. The loss in Q3 2021 is expected to be $280 million.
Coupled with the start of mass production this year, as well as the investment in future models, FF may continue to lose money for a long time in the future.
At an online investor networking session held on December 8 last year, Chuck McBride, FF's chief financial officer, said the company had revised its estimates for the additional funds needed to achieve profitability and positive cash flow in 2024. Based on the estimates at November 12, 2021, FF will require $1.5 billion in additional funding, up from a previous estimate of $1.4 billion.
However, this additional required funding will be used for the FF81 and FF71 projects, independent of the first project, FF91.
FF91 test Source: FF
The mass production of the FF91 became a life-saving straw, but the problem was that the orders in FF's hands were inherently suspicious, and according to the special committee's investigation, only a few hundred of the 14,000 orders had been paid.
With the suspension of his nephew Wang Jiawei and the adjustment of the high-level structure, Jia Yueting's voice in FF may also be affected.
Since the construction of the car in 2014, the time has been nearly 8 years, and Jia Yueting has experienced many "ticket jumping" in the car. The mass production time announced by FF has also been repeatedly delayed, from "12 months after the listing of the mass production delivery" to "mass production will begin in the third quarter of 2022", and then the specific mass production time is no longer mentioned.
Today, although the outside world has seen the first quasi-production car of the FF 91 assembled, it is still a question mark when it will be truly mass-produced.
This also can't help but remind people of Jia Yueting's former car-making ally Xu Jiayin.
Evergrande once took a stake in FF in 2018 and became its largest shareholder, but it didn't take long for the marriage to break down, and Evergrande turned to building its own car. At the beginning of this year, Hengchi 5 "went offline 12 days ahead of schedule". Some Evergrande Automobile employees revealed to all-weather technology that "the internal statement is mass production in the second half of the year."
But is this really the case? I am afraid that there must also be doubts.
First of all, as far as evergrande's current situation is concerned, whether there is enough funds to support mass production is still a problem.
Secondly, according to a former Evergrande automobile employee, there are still some technical problems in the mass production of Hengchi 5, "the bigger problems include high-voltage shutdown and battery overheating." In the eyes of our insiders, there is no hope of mass production. ”
Can the "brothers" who used to work together to build cars achieve mass production in 2022? Who can be the first to realize the dream of building a car? The answer may be available in a few months.