Risk Analysis of Faraday Future Intelligent Electric Inc.

Abstract

The challenges Faraday Future Intelligent Electric Inc (FF), a Los Angeles-based automaker founded in 2014 with the goal of transforming the automotive industry with connected smart electric vehicles. This paper first explores the company's troubled history, from its ambitious $500 million project to build a manufacturing plant in North Las Vegas, which was eventually abandoned due to financial difficulties, to the current struggle to deliver its flagship car model, the FF91. This article delves into the effects of FF's financial mismanagement, deglobalization caused by the pandemic, and over-reliance on the success of FF91, all of which contributed to a decline in brand reputation and market confidence. It also discusses the challenges posed by the competitive EV industry and FF's questionable pricing strategy. Despite these uncertainties, the company still managed to list on Nasdaq in July 2021. This article considers the potential outcomes of the reverse split plan FF announced to avoid delisting. Through this analysis, the article attempts to provide insight into the broader implications and applications of the company's struggles and future prospects in the context of the electric vehicle market.