Shares of Faraday Future Intelligent Electric Inc. (NASDAQ: FFIE), an electric vehicle (EV) company, trade near $0.40. That is down from a 52-week high of $7.85. The stock took a beating recently as the company disclosed it does not have enough money to build its electric sport utility vehicle. The news could ruin the company and put it out of business.
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Specifically, Bloomberg reports Faraday wants to build its first SUVs by March. It had barely more than $22 million cash at the end of last month. It needs as much as $170 million banked to begin the production process.
The price of Faraday’s RR-91 base SUV is over $150,000, and the price for some models can run as high as $180,000.
Faraday’s problem goes well beyond its cash position. It has, or will soon have, competition from Ford, Chevy, Hyundai and Tesla. These companies have iron-clad balance sheets and large product design and marketing operations. Their product releases will overrun Faraday’s efforts.
EV companies have started into two categories. The first is the “have nots,” which include Faraday and Rivian. The other is the “haves,” which comprise a large portion of the global car industry. Faraday’s cash problem may take it out of the race completely.
The car industry always has been brutally competitive. The fight for EV market share has worsened this. The world’s largest car companies have decided to put tens of billions of dollars into the new sector, believing that EV sales will make up the majority of car sales by the end of the decade. Today, the lead that global manufacturers have cannot be overcome.
Faraday is toast.
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