CEO sacked this week
-November 30,2022-
The start-up electric carmaker Faraday Future reported that construction work on their Hanford automotive plant is complete but that the long promised production kickoff for the luxury car will need to be postponed yet again. In an acknowledgment of a cash crunch, the LA-based company said they hope to be able to “announce the date for delivery of the FF 91 to customers shortly after funding has been secured”.Earlier this year they proposed to begin production in July and then postponed the date to the 4th quarter of 2022.Now more delays.
Unhappy with the company’s prospects the Faraday Future board this week sacked CEO Carl Brtifleid, replacing him immediately with FF China CEO Xuefeng (XF) Chen.
The company said “XF possesses extensive hands-on experience with global luxury automotive brands as well as vast experience in manufacturing, product planning and execution and product delivery.”
“I believe the decision to appoint XF at this critical juncture of the Company is a timely and correct one,” said FFIE Chairman of the Board of Directors Adam He. “XF is a top talent in the global automotive industry and possesses both a global perspective and extensive hands-on experience across the global automotive industrial chain. His years of experience at Ford and Jaguar Land Rover will pave a solid foundation for his leadership of Faraday Future’s global team. The Company’s top priority right now is to
deliver the FF 91 Futurist to our users with high quality and
minimal cost, and to successfully realize the US-China dual home market strategy with the ultimate goal to maximize Faraday Future stockholder interest,” added Mr. He.”
The move comes after FF in their latest financial filing with
the Securities and Exchange Commission lays out the situation questioning the very future of Faraday Future.
“The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year…. Based on its recurring losses from operations since inception and continued cash outflows from operating activities…The timing of first deliveries of FF 91 vehicles is uncertain and is not expected to occur in 2022 and remains subject to various conditions, many of which are outside of FF’s control, including the timing, size, and availability of additional financing as well as the implementation and effectiveness of FF’s headcount reductions…”
The company’s stock traded on the NASDAQ, reflects a gloomy outlook with shares valued at just 30 cents a share – a 94% drop this year. Since the CEO announcement on November 29, there was a move higher however, to35 cents.
Faraday Future first announced back in November 2015 that it would invest up to $1 billion in its first manufacturing facility.In 2017 they picked Las Vegas as the place to build a new plant but in July 2017 they gave up the idea. In August of that year the company announced that it had signed a lease for the million sf vacant former Pirelli tire plant in Hanford, California. At that time, FF said that it could employ up to 1,300 people over time and build up to 10,000 cars a year at that location. FF had raised money in a SPAC (special purpose acquisition company) stock offering bringing in $1 billion in investor’s money
But since then the company has bled red ink with their latest financial filing reporting some $3.3 billion in accumulated debt.
“Total assets on September 30, 2022, were $541 million, which include $32 million of cash, compared to $907 million total assets on December 31, 2021. Total liabilities were approximately $253 million, versus approximately $340 million on December 31, 2021. Since inception, the Company has incurred cumulative losses from operations and negative cash flows from operating activities, and the Company reported an accumulated deficit of approximately $3.3 billion as of September 30, 2022. The Company expects to continue to generate significant operating losses for the foreseeable future ……”
On the plus side their net loss has decreased from a year ago as they had slowed expenses. and promise to reduce staff.
“Our registration statement becoming effective allows us to tap into some of the financing agreements we entered into in recent months. We strengthened our finance leadership, appointed a new auditor, and we filed our third quarter financials on time despite these transitions. We have completed important funding agreements and are optimistic that we can put in place the additional funding we need to launch the FF 91. “