Faraday Future – Skin deep.

Uncertainty is still the name of the game.

• Faraday Future has managed to recreate a veneer of credibility, but its plans look as unbelievable as ever making wonder whether this recovery is just skin deep.
• For such a young company, Faraday Future (founded in 2014) already has a long and chequered history meaning that anything it does from here will be met with scathing scepticism.
• From almost certain bankruptcy at the end of 2018, the settlement of its dispute with Evergrande (see here) combined with a $225m cash injection from Birch Lake Associates has allowed the company to limp through 2019.
• In September FF announced the recruitment of Carsten Breitfeld formally of Byton and BMW as its new CEO.
• This has been followed with other senior appointments from the automotive industry that go a long way towards giving the impression that the company has turned a corner.
• The company will now focus on 2 models:
  • FF91: the long-promised, often delayed but now relaunched as an ultra-luxury, high-end vehicle that will attempt to rival the Mercedes-Maybach s650.
  • This vehicle has screens everywhere, boasts 1,050hp, 0-60 in 2.39 seconds, fully reclining rear seats, space for a champagne fridge and multiple 4G LTE modems.
  • The FF91 will cost a staggering $175,000 meaning that it will be competing against the most luxurious brands in the industry.
  • This is where questions arise as FF states that it is targeting high quality, high efficiency and cost-effective production of the ultra-luxury “new species” FF 91.
  • The one thing that one does not do when asking customers to pay $175,000 for an unknown brand is cut corners and I suspect this approach may result in a perception of low value for money when the FF91 makes into the hands of reviewers.
  • Other questions include why the vehicle has multiple modems and why there is no 5G.
  • The technology industry seems to be of the opinion that 5G is essential for connected vehicles and so why this has not been included is a mystery.
  • Also, I see no reason at all for multiple modems as this approach is not going to provide a solution to weak network coverage.
  • FF81: a more budget-friendly EV that will be priced around $40,000 and is likely to see much more demand and is scheduled to go on sale in 2021.
• With new management and a new plan in place, the company is raising money to take it through to an IPO in 2021.
• This means that Breitfeld effectively has 12 months to get this company into the kind of shape that will make suitable for an IPO.
• Following the meltdown of WeWork’s IPO and the long lead time required for vehicles, I think that there is no way that this company will be close to being IPO ready by the end of the next year.
• The net result will be further fund-raisings and more acrimony over missed targets (IPO).
• I am prepared to consider the possibility that Faraday Future is once again a going concern but some of the plans being discussed have an air of incredibility about them.
• I may be wrong but at the moment the recovery at Faraday Future looks skin deep.