Faraday Future, an electric car startup, reported its third-quarter earnings for the quarter that ended Sept. 30. According to the results, the company reported an operating loss of about $81 million for the third quarter, compared with an operating loss of about $186 million for the same period a year earlier. The company’s net loss for the third quarter decreased to approximately $103 million, compared to a net loss of approximately $304 million for the same period last year.
Faraday Future said the third-quarter spending was primarily used to complete the final phase of vehicle production and build tooling, engineering, testing, certification capabilities, and more at its Hanford, Calif., manufacturing facility. Expenses for these activities were lower compared to the same period last year. The reduction in operating loss in the third quarter was also due to the reduction in expenses caused by the delayed procurement of parts and the slowdown in the development of projects related to future electric vehicle models.
Faraday Future said it had total assets of $541 million as of Sept. 30 this year, including $32 million in cash, down from $121 million in cash at the end of the previous quarter.
Faraday Future said it would continue to generate large operating losses for the foreseeable future, expressed “deep doubt” about the company’s ability to continue operating, and said it was currently uncertain when the first batch of FF 91 luxury electric vehicles would be delivered. Earlier this year, Faraday Future said it planned to start delivering the car in the fourth quarter of this year.
But Faraday Future CEO Carsten Breitfeld said, “The third quarter was an inflection point for the company, with positive momentum in both car projects and financing projects. The company’s car assembly area at the ieFactory in Hanford, California, completed construction and Equipment installation. In addition, the FF 91 testing and verification project has also made strong progress, including vehicle cruising range, acceleration and braking and other key performance indicators of FF 91 are even better than promised.” He also added, “We have completed important The financing agreement for the FF 91…enables the additional funding required to deliver the FF 91. The company is currently revising its budget and production plans and expects to announce to customers when the FF 91 will be delivered shortly after funding becomes available.”
Shares of Faraday Future have fallen about 94% this year. The company said it will need more working capital and increase production capacity in the future.
Faraday Future added that it had received 369 pre-orders for electric vehicles as of Nov. 17, down from 399 as of June 30 this year. To be clear, Faraday Future’s pre-orders of this kind are refundable deposits and non-binding.
In September, Faraday Future reached an agreement with the company’s second-largest shareholder to resolve existing governance disputes. Earlier, the second largest shareholder sued Faraday Future, asking the company to remove two board members.
Like many of its peers in the electric vehicle space, Faraday Future has struggled with rising costs and supply chain issues that have caused repeated delays in the delivery of its FF 91 luxury electric vehicle.
The cost of lithium and primary battery materials has risen this year. Rising costs and depleting cash reserves have investors questioning the health of the balance sheets of various EV startups.
Earlier this month, Arrival SA, a British commercial electric vehicle start-up, also warned that the company’s business continuity was at risk.
Meanwhile, Faraday Future narrowed its third-quarter loss to $103.4 million from $303.9 million a year earlier.
