Faraday Future, a startup specializing in electric vehicles luxury, recently said she had ” significant doubts about its ability to continue operations in 2023 “. It also postpones the date of first deliveries of the FF 91.
Faraday Future is going through a delicate period
This isn’t the first time Faraday Future has delayed deliveries of its FF 91s. In July, the company had already pushed back the start of production and first deliveries to late 2022, citing supply chain issues and a lack of money. Now, Faraday Future says she don’t even hope for deliveries in 2022. As of November 17, 2022, the startup had 369 pre-orders, compared to 399 as of June 30. Which means some buyers backed out.
According Techcrunch, Faraday Future cites several conditions that may affect the delivery schedule, including suppliers failing to meet their obligations and the schedule. Top of the list of concerns is whether Faraday will be able to obtain the necessary funds to spend the year. Last week, the company secured a $350 million lifeline to help launch its first vehicle, signing a financing deal with Yorkville Advisors Global.
In September 2022, Faraday Future also secured $100 million in funding from Hong Kong Senyun International. It doesn’t seem like that’s enough to keep the startup’s head above water in the short term. Faraday Future may need additional funds later in 2023 to support the ramp-up of production of FF 91 and generate revenue to put the company on the path to profitability.
Since its inception, the company has suffered heavy losses. Obviously, its cash flow is negative and the accumulated deficit is approximately $3.3 billion. The startup closed the third quarter with $31.76 million in cash, up from $121 million at the end of last year. Net losses for the quarter amounted to $103.4 million. Faraday Future stock is down 94% this year.
In an attempt to get back on its feet, Faraday Future will cut the salaries of its senior executives. The company has also been accused by the Securities and Exchange Commission (SEC) of United States having provided false statements at the time of its IPO.