Faraday Future Intelligent Electric (NASDAQ:FFIE) stock is down 5% today after postponing its electric vehicle (EV) launch in a bid for investments. The California-based EV maker is now estimating the launch of its FF 91 model will take place in the third or fourth quarter of this year.
Late Monday, Faraday posted a filing clarifying that it is in the midst of “discussions and negotiations” with anonymous potential investors. This, according to Faraday, is the context behind the delayed launch of its flagship FF 91 electric crossover. It stated in the filing:
“The company needs additional cash to commercially launch the FF 91, and is currently seeking to raise additional capital to fund its operations through December 31, 2022.”
Faraday has repeatedly pushed back the launch of the EV, mostly on cash flow issues. At one point, Faraday claimed it would be in the swing of production by early 2018. Later, the company promised a release this very month. It also previously stated it wouldn’t require additional investments until after the launch of the FF 91. Now, it appears the troubled startup is pursuing funds amounting to about $325 million.
This week’s news only adds yet another point of friction for Faraday. The company has been repeatedly caught in controversy the past year.
FFIE Stock Falls as FF91 Launch Seems a Distant Reality
Faraday has had a bumpy year so far. Just this March, the Securities and Exchange Commission (SEC) subpoenaed the company. The company was under investigations related to potentially inaccurate claims made to earn investments.
According to the SEC, the company grossly overstated the number of reservations made for its upcoming FF 91 model, conflating actual paid reservations with interested customers. At one point, the company touted more than 14,000 recent reservations. In reality, only a few hundred had already paid for its vehicle. As such, a number of Faraday executives were outed, including chairman Brian Krolicki as well as general counsel and secretary Jarret Johnson.
Faraday is increasingly becoming a cautionary tale in the world of emissions-less vehicles. Many analysts are beginning to compare the company to Lordstown Motors (NASDAQ:RIDE), another troubled EV startup which also came under fire for fake reservation figures.
FFIE is down more than 60% year-to-date. Whether the company manages to regain lost share value ahead of yet another round of funding remains to be seen.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
