Jia Yueting, who can't come back, is difficult to build a car

Since Weibo opened up to show the home of some users' IPs, bloggers have paid great attention to the positioning of some public figures, including Jia Yueting, who "returned to China next week". On May 7, Jia Yueting's Weibo post showed that his IP belonged to Beijing, causing netizens to speculate whether he had returned to China. On May 8, a relevant person close to FF confirmed to the Beijing Business Daily reporter that Jia Yueting did not return to China.

It is reported that like most public figures, their accounts are managed by a professional operation team, and the social media account of "Jia Yueting" takes into account the problem of jet lag, and some of the content is released with the assistance of the domestic operation team. Regarding the progress of car manufacturing, he said that "the car construction is still carried out according to the original plan, which is very smooth."

Losses increased

After the rapid expansion of LeTV and then the collapse, Jia Yueting went overseas with huge debts and set up a new energy vehicle company Faraday Future (FF) in the United States, intending to make a comeback. However, the financial report for the third quarter of 2021 disclosed on May 7, Beijing time, made investors full of worries about the "second spring" of Jia Yueting's career.

According to the financial report, the operating expenses of FF in the third quarter of 2021 were as high as $186 million, compared with only $17.55 million in the same period of 2020, up about 960% year-on-year. FF explained that "the significant increase in operating expenses was mainly due to increased investment in the Hanford manufacturing plant in preparation for full commercial production".

Meanwhile, in the third quarter of 2021, FF's net loss reached $304 million, compared to a net loss of $33 million for the same period in 2020. As of March 31, 2022, FF had a cash balance of $276 million, including $97 million in planned payments on notes and accrued interest. For the net loss, which increased by nearly 10 times year-on-year, FF explained: "The increase in net loss was mainly due to a significant increase in operating expenses, losses on changes in fair value of related party notes payable, notes payable denominated at fair value, fair value losses on warrant liabilities, and losses arising from the treatment of related party notes payable, notes payable and supplier payments payable. ”

It is worth noting that this "high expenditure" and "high loss" financial report was once difficult to produce. Previously, due to the repeated postponement of the release of the three quarterly reports, in November 2021, the SEC of the US Securities and Exchange Commission issued a delisting warning letter, if it could not be submitted on May 6 this year, FF would be delisted, and now the company is a "pressure line" to give the report card.

Financial concerns

As for the reasons for the loss, FF explained that it was mainly due to the increase in operating expenses, related party notes payable, notes payable denominated at fair value, fair value change losses on warrant liabilities, and losses arising from the processing of related party notes, notes payable and supplier payments payable. In this regard, Shen Meng, executive director of Chanson Capital, told the Beijing Business Daily reporter that Jia Yueting's performance when he was in charge of LeTV and the declaration of his personal bankruptcy in the United States have made the market lose confidence in it, and it is still unnecessary to hope for its "car-making" cause.

Experts look back on LeTV's past is not without reason, LeTV's financial problems are now looming in the FF financial report, with the 2016 financial report as a reference, when LeTV "deposit and loan double high", the book funds are full at the same time there is a large number of financing, borrowing, the reason is that the company holds most of the restricted funds, including a variety of unpaid bills.

According to the 2021 interim report of the detailed data released, FF's cash and cash equivalents were $17,900, down 48.27% year-on-year, while short-term liabilities and liabilities payable reached about $500,000 and $1.98 million, respectively, and current liabilities reached about $2.48 million.

U.S. short-selling agency J Capital Research released a report arguing that FF has not delivered the car for eight years, and that FF has broken its commitment to build factories in five locations in the United States and China, and has repeatedly postponed the process of building a sixth plant; FF is being sued by dozens of unpaid suppliers and failing to disclose that its assets in China have been frozen by the courts.

In response to the question, Jia Yueting responded through his circle of friends on personal social media on the same day that Mei Qijin's remarks were "cold rice and hot stir-fry, nonsense" .

Build a bus hopping ticket

In addition to financial concerns, FF's automotive products have also been delayed for a long time. According to official FF data, as of March 31, 2022, the number of FF 91 models booked was 401. According to the plan, FF's first production car, the FF 91, will be delivered within 12 months after FF goes public on the NASDAQ.

In the surging field of new energy vehicles, Xiaopeng G3 took three years to get off the line, Weilai ES8 took about two and a half years, and FF 91 released a quasi-mass production model this year, more than eight years since the establishment of the company, and five years after the debut of the FF 91 sample car in 2017.

Liang Zhenpeng, a veteran industrial economic observer, is not optimistic about the future of FF, and he believes that what FF 91 needs to consider is not the problem of seizing the market with first-movers, but there is no comparison at all. He told the Beijing Business Daily reporter that Tesla, Weilai these companies, whether profit or loss, are in the stage of continuous rapid expansion of commercial mass production, are running on the road, every year a large number of sales of cars, and FF after so many years, have not been able to go to the market.

Experts' doubts are not unfounded, and the previous FF car-making activities have been repeatedly delayed. In 2016, Jia Yueting became the actual controller of FF, and in 2018, he received capital injection from Evergrande, and announced that mass production would be achieved at the end of the same year and delivered in the first quarter of 2019. Since then, Jia Yueting and Evergrande have quarreled over control, and the mass production plan has also been shelved. In July 2020, Jia Yueting once again announced that "there is only one foot left before mass production", but it has not been cashed in to this day.

"FF has no actual operating performance, has been a huge loss since its inception, is still in the investment, and still does not see any value." Liang Zhenpeng said.

Beijing Business Daily reporter Jin Chaoli Wang Zhuli