Faraday Future Delays First EV Model, Says It Needs More Cash

Faraday Future said that it needed to raise $325 million to produce the vehicle and fund its business through the end of the year, and that it was in negotiations with potential investors.

In the short term, the company said it hoped to raise around $200 million through private investment in public equity, or PIPE, from professional investors. The funds were needed to address rising raw material costs and find new sources of parts, the company said in an investor presentation.

Some of the funds would go toward technology upgrades for the FF 91, which was unveiled in 2017. Faraday Future, established in 2014, said it additionally needed more capital to fund its other business operations, including research and development and designing future vehicles.

The disclosure is the latest example of the struggles weighing on young automotive startups during a time of parts shortages and tightening capital markets.

Rivian Automotive Inc. slashed production targets in half this March, citing supply problems with semiconductors.

Lucid Group Inc., which focuses on high-end electric vehicles, in February cut its 2022 vehicle-output forecast by as much as 40%, attributing it to constraints on some parts and materials. Aspiring electric-truck manufacturer

Lordstown Motors Corp.

has delayed its first model and recently said it needs to raise more capital to survive.

EV startup

Canoo Inc.

said in May that it had substantial doubt it could continue funding its operations.

In May, Faraday Future reported a net loss of $303 million for the first quarter, compared with a $33 million loss for the prior-year period. The company also said it had $276 million in cash as of Mar. 31, down from $505 million at the end of December.

The auto maker raised $1 billion in 2021 after going public by merging with a special-purpose acquisition company, or SPAC. Shares have fallen around 35% in the past week, and 60% since the company went public. Faraday Future’s stock was trading at about $2 a share Tuesday morning.

The young car company has delayed the start of production several times since 2017. As recently as last month, Faraday Future said it expected to begin producing and delivering vehicles to customers in July.

The EV startup said it had 401 preorders for the FF 91 as of Mar. 31. The 1,000-horsepower FF91 is expected to cost between $120,000 and $180,000 when it goes on sale.

Faraday Future said it hoped to produce between 6,000 to 8,000 vehicles next year.

Write to Sean McLain at [email protected]