Six years later, Lao Jia finally built a car. Five months after the first car rolled off the assembly line, only three cars were delivered, and the company's market value dropped to RMB 500 million. Last Tuesday was the "919 Developer AI Co-Creation Festival" of Faraday Future (hereinafter referred to as FF) founded by Lao Jia. "The focus of the event is to create additional value for developers to co-create by establishing a community that breaks boundaries between different industries."


(Picture note: Jia Yueting delivered a speech fluently in English)

Official delivery of the third vehicle

Well, speaking in human terms, FF held an FF91 car delivery and user dialogue event at its headquarters in Southern California.

At this event, FF officially delivered a FF91 that had just come off the production line to star agent Kelvin Sherman. This is the third vehicle officially delivered to users by FF. Sherman is the manager of many top stars including Kendall Jenner and Justin Bieber.


(Picture note: FF Co-Creation Festival event site)

Emma Hernan, a female internet celebrity with two million followers on Instagram, also attended the event and will become the next owner of the FF91. The first owners of FF cars seem to be people in the entertainment industry. The owner of the second FF91 is Jason Oppenheim, a well-known luxury real estate agent. He and Herman are both stars of the Netflix reality mansion show "Selling Sunset".

More than a month ago, Jia Yueting officially delivered the first FF91 to the famous designer Rem Koolhaas on behalf of FF. Obviously, FF hopes that these Internet celebrities with extensive connections in Southern California and Hollywood can exert their influence and bring subsequent sales to FF91 among the rich and famous.

In terms of marketing concept innovation, FF and Lao Jia have always been far ahead in the industry. Even the car delivery event is so different.

The first batch of new cars delivered by FF is called "FF912.0 Futurist Alliance" (Futurist Alliance Edition). It is limited to 300 units worldwide. It is positioned as "extremely intelligent technology and luxury" and is priced at more than 300,000 US dollars. The car owner users delivered by FF are called "developer co-creation officers", and they also shoulder the important task of co-creating with FF to "generate ecological feedback between music, entertainment and FF912.0 Futurist Alliance".

It seems that Lao Jia is still obsessed with the concepts of "breaking boundaries and ecological counterattack", and now he has added the new concept of AI. At this 919 event, FF also held a "Developer AI Co-Creation" seminar. FF technical staff introduced FF's AI strategy and the latest progress of developer co-creation to the "Developer Co-Creation Officer" (car owner), and announced the launch of the FF Open Platform and FF Lab.

FF founder Jia Yueting attended the 919 event with a smile on his face and delivered a brief speech in fluent English. Lao Jia’s current official position in the company is founder and chief product user ecosystem officer (CPUO). Although Jia Yueting is not the CEO and is not even on the FF board of directors, everyone knows that he still firmly controls the company.

Compared with the 2017 CES FF91 launch conference, Jia Yueting, who has lived in the United States for six years, has significantly improved his spoken English. Before the FF91 press conference that year, Jia Yueting spent three days reading the speech script carefully. After taking the stage, he looked at the teleprompter before completing his first English speech.

In the first two years since FF was founded, the electric vehicle startup, with Jia Yueting's continuous capital investment, poached managers from giant car companies such as Tesla, General Motors, and BMW. However, Jia Yueting has been unwilling to disclose his relationship with LeTV and FF. Even FF officials said that Jia Yueting is only "one of the investors." It was not until FF released FF91 in Las Vegas in 2017 that he spoke on stage for the first time as a founder.


(Owner of the first FF91 delivered)

Get up early and catch a late market

Although FF was founded as early as 2014 and released its first model as early as January 2017, ahead of many new competitors, in the past six years or so, FF has always been in a state of "can build cars if financing is in place".

At the same time, many new car-making forces that started later than Jia Yueting have already achieved large-scale mass production and are on the right track for successful listings and financing. The sales of China's new powerful manufacturers have taken off. In the first half of this year, the delivery volumes of Lideal, Xpeng and NIO reached 139,000, 54,000 and 41,000 respectively.

The new American counterparts are also on the right track. Lucid, which Jia Yueting once invested in, delivered 1,404 vehicles in the second quarter of this year, and its production target this year exceeds 10,000 vehicles. Rivian delivered 12,000 vehicles during the same period, and its production target this year is to exceed 50,000 vehicles. Even Fisker, a living fossil company that has experienced bankruptcy and rebirth, plans to produce 20,000-23,000 vehicles this year.

Compared with these peers who started late, FF's production capacity is indeed worrying. According to FF’s official statement, they plan to hold a “FF Delivery Co-Creation Day” event for every FF912.0 user at the end of this year. This may mean that the delivery scale of FF91 at the end of this year will be very limited. The production capacity of FF's Hanford plant in central California is still unknown.

Due to a broken capital chain, FF was forced to abandon its planned investment of US$1 billion in a factory in the Las Vegas desert (only the leveling of the land was completed). In the summer of 2017, they rented a tire factory that had been abandoned for many years in Hanford and transformed it into a car assembly plant. Since then, they have been in a state of "waiting for financing and preparing for mass production."

When FF was launched in the summer of 2021, it was stated that the Hanford factory would start production in 2022 and already had mass production capabilities. In the future, the production capacity will reach 10,000 vehicles per year. But two years have passed, and the mass production time of FF91 has been pushed back again and again, and it seems that there is always a shortage of funds.

In February this year, FF Global CEO Chen Xuefeng announced that it had completed US$135 million in financing and planned to roll off the first FF91 in early April this year and deliver it at the end of April. By mid-April, FF announced the production of the first FF91 as scheduled, but the delivery was postponed to the end of May due to lack of funds. Then another three months passed, and it was not until mid-August that the first vehicle was officially delivered.

Jia Yueting's explanation is still "lack of money." In June this year, Jia Yueting issued an open letter to all investors, admitting that "the FF team's insufficient industrialization capabilities and insufficient financing capabilities" led to the delay in the second phase delivery of FF91. He admitted that at the end of the second quarter of this year, FF's cash balance was only $16 million.

It has been more than five months since the FF91 officially rolled off the production line, but there are still only three official deliveries. A FF spokesperson subsequently explained to Sina Technology that the production capacity of FF91 is climbing, but the specific production and delivery volume will be announced in the financial report and will not be disclosed to the media for the time being.

However, despite extremely limited production capacity, FF's marketing activities have not relaxed. In addition to holding a "Delivery Co-Creation Day" event for each car owner, FF will also hold a "FF Developer Track Co-Creation Day Event" next month.


(Every FF91 has a delivery event)

Market value of 500 million after two years on the market

Although FF's delivery and co-creation activities look very high-end, the capital market does not recognize Jia Yueting's dream. Compared with the grand occasion when it was listed two years ago, FF's market value has evaporated by more than 90%. The current market value is less than 73 million US dollars, only more than 500 million yuan.

In July 2021, FF completed a backdoor listing on Nasdaq by acquiring SPAC. FF surged 20% at the opening, with a market value of more than US$5.4 billion. Although Jia Yueting refused all media interviews, at the listing site in New York, he was in a good mood and said with a cheerful face that he "must return to China."

Since leaving China at the end of September 2017, Jia Yueting has lived in Southern California for six years. When I first arrived in the United States, I still had the idea of ​​"I'll go back to China next week." Because LeTV's ecological capital chain was broken, Jia Yueting, who was directly responsible, was saddled with a debt of 20 billion yuan. He later explained that if he did not return to China, he might never be able to leave the country again and would be unable to be responsible for FF's financing activities.

Even though Jia Yueting came to the United States, LeTV's creditors later pursued him to the United States and successfully froze Jia Yueting's assets in the United States through litigation, especially his shareholding in FF, putting FF in a dilemma where it was unable to raise funds. This move blocked Jia Yueting's destiny and forced him to solve the debt problem.

It was not until May 2020 that Jia Yueting finally reached an agreement with his creditors, applied for bankruptcy reorganization in the California court, and injected his FF holdings into a trust for future debt repayment. This cleared the way for FF’s subsequent financing and listing.

Although FF successfully landed on Nasdaq through a backdoor listing, as the mass production and delivery date has been pushed back again and again, the capital market has also lost confidence in this electric vehicle company that has always been in a financing situation.

Two years after its listing, FF's current market value is only US$72.9 million, and it has become a "penny stock" (Penny Stock). In comparison, Lucid has a market value of US$11.6 billion, Rivian has a market value of US$19.5 billion, and even niche Fisker has a market value of US$1.9 billion.

According to FF's current market value of less than 73 million US dollars, the value of Jia Yueting's shares is less than 150 million yuan. It is an impossible task to expect FF's shares to repay the 20 billion yuan of debt he has shouldered, and returning to China is an unattainable goal.

What does becoming a "penny stock" mean to FF? Equity research institutions and institutional investors will not be interested in "penny stocks" whose stock prices are too low, and FF's financing may be ignored. And if the stock price continues to be below $1, FF will even be forced to delist.

The tactic that FF came up with to raise the stock price was to merge shares, that is, a reverse split. At the end of last month, FF announced a 1:80 reverse stock split of its common shares. Thanks to the miracle of merging 80 shares per share, FF's stock price got out of the embarrassing situation of a few cents, met the minimum stock price requirements, and avoided being forced to delist. But even after 80 shares were merged into 1 share, FF’s current share price is still less than $4.

In order to stimulate the rise in stock prices, FF launched a plan of "management increasing stock holdings". Last Thursday, FF issued an announcement stating that Jia Yueting and other FF core executives promised to use half of their salary to increase their stock holdings in the next three months, use cash to purchase Class A ordinary shares, and lock them in for at least half a year. At the same time, FF also announced that Matthias Aydt, senior vice president of product executive, will serve as global CEO to focus on promoting the production and delivery of FF91.

Chen Xuefeng, the former global CEO of FF, turned to serve as China CEO and senior vice president of global industrialization, focusing on the release of FF91 in China and "the next stage of the company's development including the implementation of the Sino-US dual home strategy." He focused on the advancement of the company's Chinese business, including Chinese joint ventures, entering the Chinese market, integrating the Chinese supply chain, and continuing to reduce costs.

For Chen Xuefeng, this is a return to work. In November 2022, FF suddenly dismissed former global CEO Bi Fukang from his position and appointed Chen Xuefeng to take over the position. Breit Fukang, the former co-founder of Byton Motors, unexpectedly joined FF in 2019 and completed FF's backdoor listing; then he unexpectedly left suddenly.

Just after FF announced management adjustments, Jia Yueting received another "bad news": LeTV's first-instance verdict was announced. The Beijing Financial Court ruled that due to "ten consecutive years of financial fraud," LeTV needs to pay the plaintiff investors a total of approximately 2.04 billion yuan in compensation for investment loss, commissions, stamp taxes, etc. within ten days from the date of the judgment. Jia Yueting, who is also the defendant, needs to bear joint liability for compensation. LeTV cannot afford the compensation of 2 billion yuan. In the first half of this year, LeTV’s current assets were only 500 million yuan.

Of course, this judgment has no practical significance to Jia Yueting, who is overseas. As early as April last year, Jia Yueting was fined RMB 240 million by the China Securities Regulatory Commission and banned from the securities market for life because of LeTV's ten-year financial fraud.