Attendees look at Faraday Future’s FF 91 prototype electric crossover vehicle after it was unveiled at CES 2017 on January 3, 2017, in Las Vegas.

Getty Images

Faraday Future was expected to be the “next Tesla.” It was going to be a leader in electric vehicles with its groundbreaking FF 91 crossover that would usher in an “entirely new species” of automobile.

Those were some of the claims surrounding the California EV start-up during an elaborate unveiling of the FF 91 at the Consumer Electronics Show in January 2017. If all had gone to plan, the vehicle would have been on the market now for several years, ahead of an influx of EVs from emerging start-ups and traditional automakers.

Instead, quite the opposite happened. The executives that made those proclamations left Faraday Future; it abandoned a plan for a $1 billion factory in Nevada; and it is yet to build one vehicle. Its founder and CEO, Chinese billionaire Jia “YT” Yueting, also filed for bankruptcy in 2019.

But Faraday Future now has new life – and capital – thanks to a SPAC deal with Property Solutions Acquisition Corp. that is providing the embattled automaker with $1 billion. The company’s shares shot up by more than 15% minutes into its debut Thursday on the Nasdaq under the ticker “FFIE.

It’s a new beginning for Faraday Future but also a countdown to proving its worth to investors, including starting production and sales of the FF 91 within a year from now.

“We have been able to convince the capital market that this is a different company now, a company which can deliver a serious business plan,” Faraday Future CEO Carsten Breitfeld said in an interview. “But now we have to deliver, and this is absolutely key.”

Delivering on plans is something newly public EV start-ups have not been able to do. Starting with Nikola last year, SPAC deals for the automotive industry exploded, but reality has set in for many companies. Bold claims by executives have led to federal investigations into EV start-ups such as Nikola, Canoo and Lordstown Motors, which last month warned investors of potential bankruptcy concerns.

Other EV start-ups such as privately held Rivian and Lucid, which is soon expected to go public via a SPAC merger, have delayed production and delivery of their first vehicles.

“Building a vehicle is not that easy to do,” said Stephanie Brinley, principal automotive analyst at IHS Markit. “It’s a very complex process and it’s very capital intensive. Even experienced automakers run into situations from time to time where programs are delayed.”

‘Under promise and over deliver’

Looking to the Future



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *