EV start-up
Faraday Future Intelligent Electric
has a Master Plan, just like
Tesla.
It’s plan isn’t as detailed as Tesla’s, but Faraday is focused on achieving profitability. Investors are reacting positively at the start of a new trading day.
Monday, Faraday (ticker: FFIE) outlined a plan to “achieve sustainability and profitability while aiming to reduce dependence on external funding sources.” Cutting costs and ceasing any new convertible-note agreements are part of the plan.
There isn’t a lot of detail. Still, shares are up about 4.6% in premarket trading at $1.13 apiece, while
S&P 500
and
Nasdaq Composite
futures are down about 0.3% and 0.4%, respectively.
Faraday stock is down about 99% from a record high of $1,660 set in February 2021. The company completed a 1-for-80 reverse stock split in August, and its market capitalization is now about $20 million.
Faraday ended the second quarter with roughly $20 million in cash, and another $60 million in deposits for preorders. Management said the company began generating sales in August. The number of deliveries isn’t known. Faraday didn’t immediately return a request for comment.
Faraday is likely delivering its FF 91 ultraluxury EV. Investors can think of a Maybach with batteries.
When Faraday was raising money via a merger with a special-purpose acquisition company in 2021, it projected 2023 sales of about $4 billion, and 2024 sales of about $10.5 billion. That just isn’t going to happen.
Tesla (TSLA) pioneered Master Plans in the EV space. Master Plan 1 was released in 2006 and outlined a plan to make a high-priced car, essentially the Model S, and use that money to develop a lower-priced car, essentially the Model 3. Master Plan 2, or part deux as it was named, focused on energy generation, storage, and autonomous-driving solutions. Part 3 was published in 2023 and outlined how to transition the world off of carbon dioxide-generating fossil fuels. Carbon dioxide is the main gas blamed for global climate change.
Tesla has accomplished many parts of all three plans. It’s been the only U.S. EV start-up to get to the point of consistent profitability and free-cash-flow generation.
Write to Al Root at [email protected]
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