Release Date: May 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Faraday Future Intelligent Electric Inc (FFIE, Financial) transitioned from the development phase to the production and revenue-generating phase in 2023.
- The company commenced production of its flagship FF 91 2.0 and successfully delivered 11 vehicles to date.
- FFIE launched several customer-focused initiatives, including a leasing program, home charging installation, and a public charging program.
- The company announced potential entry into the Middle East market, expanding its geographic strategy beyond the US and China.
- FFIE reported a significant reduction in operating expenses, leading to a decreased net loss for fiscal year 2023 compared to 2022.
Negative Points
- Faraday Future Intelligent Electric Inc (FFIE) reported a revenue of only $0.8 million for fiscal year 2023, indicating slow initial sales.
- The company faced challenges in funding to support its supply chain, resulting in lower-than-anticipated production volumes.
- FFIE's cash balance was critically low at $4 million as of December 31, 2023, including restricted cash.
- The company has incurred cumulative losses from operations and negative cash flows from operating activities, with an accumulated deficit of approximately $4.0 billion.
- FFIE's stock has experienced dramatic revaluation, and the company has issued all authorized shares, limiting further share issuance without shareholder approval.
Q & A Highlights
Q: Can you provide an update on the production milestones achieved in 2023?
A: (Mattias Aydt, Global CEO) In 2023, we commenced production of our flagship FF 91 2.0 on March 29th, and by April 14th, the first production vehicle rolled off the line at our California factory. The FF 91 2.0 passed US Federal Motor Vehicle Safety Standards crash tests on May 25th, with the first phase of delivery beginning shortly thereafter. We have delivered 11 vehicles to date.
Q: What strategic initiatives did Faraday Future undertake to enhance sales and service capabilities?
A: (Mattias Aydt, Global CEO) We launched a leasing program with luxury lease partners, obtained a Bureau of Automotive Repair license, activated a home charging installation program, and rolled out a public charging program. These initiatives aim to provide a seamless and luxurious experience for our customers.
Q: How is Faraday Future addressing the challenge of funding to support the supply chain?
A: (Mattias Aydt, Global CEO) We are working to shore up our supply chain to support production. We have also announced collaborations and strategic cooperation agreements, such as with the Abu Dhabi Investment Office, to bring our advanced intelligent electric vehicle capabilities to new markets.
Q: Can you elaborate on the financial results for fiscal year 2023?
A: (Jonathan Maroko, Interim CFO) Faraday Future reported revenue of $0.8 million for fiscal year 2023 and a cost of goods sold of $43 million. Loss from operations was $286 million, a significant reduction from $437 million in fiscal year 2022. Net loss decreased to $432 million from $602 million in the previous year.
Q: What measures have been implemented to reduce costs and strengthen the financial position?
A: (Jonathan Maroko, Interim CFO) We have rightsized our operational footprint and workforce, in-sourced work where possible, and resourced suppliers to lower our cost structure. We also raised approximately $300 million through various financing activities and unlocked $12 million of non-dilutive capital through a sale and leaseback of our California facility.
Q: What are the future strategic plans for Faraday Future?
A: (Mattias Aydt, Global CEO) We are considering adjusting our strategy to distinguish market segments by going back to a two-brand setup. This will integrate our high-value AI tech luxury solutions into more affordable mass-market products. We also plan to leverage our dual home market strategy to integrate the strengths of the US and Chinese automotive industries.
Q: How does Faraday Future plan to improve production and delivery in 2024?
A: (Mattias Aydt, Global CEO) Our primary focus in 2024 is ramping up production. We have made significant improvements in vehicle build quality and streamlined our vehicle assembly process to increase throughput capability. We are also enhancing quality assurance in every phase of the company.
Q: What is the current cash position and how does it compare to previous years?
A: (Jonathan Maroko, Interim CFO) As of December 31, 2023, our cash balance was $4 million, including restricted cash of $2 million, compared to $17 million at the end of 2022. As of May 23, 2024, our cash position was approximately $5 million, including restricted cash of $2 million.
Q: How is Faraday Future addressing the revaluation of its stock and attracting new investors?
A: (Jonathan Maroko, Interim CFO) We believe the stock was previously undervalued and welcome the recent revaluation. This has drawn the attention of many investors, and we are pursuing additional strategic investors in the Middle East and globally. We are also investigating equipment and IP-backed financing to reduce reliance on dilutive funding.
Q: What are the key takeaways from the co-creation approach with notable personalities?
A: (Mattias Aydt, Global CEO) The co-creation approach with personalities like Jason Oppenheim and Chris Brown has provided valuable feedback ranging from technical suggestions to brand strategy. This has helped refine our products and services and demonstrates our commitment to a user-focused approach.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
