Faraday Future, the California-based electric vehicle startup, today announced its second quarter results with exciting announcements and key financial updates.
Since its inception in 2014, Faraday Future has had a vision to disrupt the automotive industry. Still, so far we haven’t seen much from Faraday as the company has pushed back the launch of its flagship EV model, the FF 91. Can the EV startup turn things around in the second half of 2022? ?
Last month, Electrek reported that Faraday Future was delaying FF 91 to seek additional capital. Then, earlier this month, Faraday executed a non-binding term sheet with several major investors.
The filing mentioned convertible notes in the principal amount of up to $600 million, which Faraday could use to launch FF91. Meanwhile, Faraday Future CEO Dr. Carsten Breitfeld updates us on his Q2 earnings situation, saying:
Fundraising efforts are underway and we currently expect to deliver the FF 91 to customers during the third of the fourth quarter of 2022.
At the same time, the company had several critical updates to its manufacturing process in the second quarter. On the one hand, Breitfeld mentions:
We made encouraging progress during the second quarter at our newly renamed “FF ieFactory California” manufacturing facility in Hanford, California. The mechanical, electrical and plumbing systems are in place, and the installation and construction of equipment in the final vehicle manufacturing areas is nearing completion.
However, much of Faraday Future’s progress will depend on its ability to raise funds. Let’s take a look at financial data from Faraday Future on its second quarter earnings.
A Closer Look at Faraday Futures Second Quarter Financial Results
Earlier this month, it was reported that Faraday Future would need to raise additional funds to launch FF 91 and continue operations until the end of the year.
Like many EV startups right now, Faraday faces a decades-old dilemma. Starting an automotive business is a challenge. It takes a ton of capital to build these massive facilities and outfit them to produce vehicles.
In its second-quarter results, Faraday Future posted an operating loss of about $137 million, up nearly 390% from 2021. Faraday notes that the increase was due to higher spending in engineering, design and testing (ED&T), in addition to a larger manpower to progress the FF 91.
Overall, Faraday Future recorded a net loss of approximately $142 million, almost tripled from 2021. As Faraday Future progresses with its flagship model, losses are expected.
However, the big question for investors going forward will be capital. Faraday Future ended the second quarter with $121 million in cash. But, as of August 9, Faraday’s cash balance was $52.2 million.
The company expects approximately $368 million in cash use through the end of 2022 to launch FF 91. To do so, the EV startup is looking to raise $325 million with ongoing efforts.
In addition to this, Faraday expects to need additional funds by September 2022 to continue operations. Not to mention that FF will be asking for even more to ramp up production later this year.
In total, Faraday Future’s accumulated deficit is approximately $3.2 billion at the end of the second quarter.
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