Cash-strapped electric vehicle startup Faraday Future Intelligent Electric Inc FFIE unveiled a “master plan” on Monday aimed at achieving financial stability without an overreliance on external funding.
What Happened: This plan primarily focuses on cost reduction by cutting non-essential expenses not linked to the production of the FF 91 2.0 Futurist Alliance SUV.
The company also intends to lower production costs by in-house sourcing capital-intensive systems, eliminating commitments to new convertible notes with structures similar to existing convertible notes.
Faraday Future expects that implementing this “master plan” will lead to positive cash flow and profitability. More comprehensive details will be disclosed during the company’s upcoming Investor Day.
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Why It Matters: In the second quarter, Faraday reported no revenue but accrued a net loss of $124.9 million. This marks an improvement compared to the $141.7 million loss reported in the same period the previous year. As of June 30, 2023, the company’s cash reserves amounted to $19.4 million, including $1.5 million in restricted cash.
In an open letter released on Sunday, Faraday’s Global CEO, Matthias Aydt, and founder, YT Jia, said they felt a “profound sense of pain” over the declining value of the company’s shares. They outlined various measures to counter this issue, which included exploring opportunities with potential institutional and strategic investors to secure additional capital.
The letter, released just a day before the “master plan” announcement, emphasized the company’s reliance on available funding for its development phase.
Faraday Future began trading on the NASDAQ in July 2021 following a Special Purpose Acquisition Company merger. Its stock has plummeted by 95.02% year-to-date, with a current market capitalization shrinking of approximately $28 million.
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Photo courtesy: Faraday Future
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