Second brand to be announced soon

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Author | Wang Lei, Liu Yajie

Editor | Qin Zhangyong

When it comes to attracting capital, Jia Yueting still reigns supreme.

On the evening of September 4, US time, Faraday Future's (FF) share price surged, rising by over 80% at one point before eventually settling at a 62% gain, triggering a circuit breaker.

As of press time, Faraday Future's closing price on the US stock market had surged to $5.24, representing a nearly 53% increase, and its total market value had reached $64.87 million.

What magic potion has Faraday Future, which was previously on the brink of delisting, taken?

Recent news indicates that Jia Yueting announced on social media that Faraday Future would hold a "FF China-US Auto Industry Bridge Strategy and Second Brand Launch Event."

In other words, Faraday Future's second brand is scheduled to be officially announced on September 19, with over ten questionnaires to be distributed subsequently, inviting everyone to "work together to create a popular, high-volume model that meets the needs of the US market."

With the launch of the second brand, Jia Yueting has another "story" to tell.

01 People's AI Car: Starting at 140,000 yuan

According to Jia Yueting, Faraday Future's sub-brand is called "AI Car of the Future" and "AI Car of the People."

Since it's the People's Car, it must be co-created by the people.

Jia Yueting announced the official launch of the "AI Car of the People, People's Decision-Making Co-Creation" questionnaire campaign on September 4, with the theme of "What kind of AI EV products are missing in the US blue ocean market?"

Jia Yueting stated that the campaign invites everyone to work together to create a popular, high-volume model that meets the needs of the US market through online voting and offline experiences.

The plan is to promote the development of the new brand through an open innovation model that brings together creative ideas and technologies from around the world.

It's quite interesting that to meet the needs of the US market, why is market research information being collected in the Chinese market?

Moreover, similar to its product delivery process, Faraday Future's sub-brand launch event is divided into several stages. Currently, there are two stages, with the first stage to be completed by September 19, which is when the questionnaire collection ends.

The survey results will be unveiled at the new brand launch event, and the second stage of activities will begin simultaneously.

Before concluding, Jia Yueting didn't forget to paint another picture, as participants in this campaign will have the opportunity to participate in the entire process of co-creating FF's second brand and products.

Currently, there is not much information disclosed about Faraday Future's second brand, mostly consisting of official responses.

Jia Yueting stated that unlike Faraday Future's previous top-end luxury model, the FF 91, the second brand will not only focus on AI EV but also emphasize "extreme cost-effectiveness," creating AI EV products that offer "double the performance at half the price."

According to the official announcement, this new brand will break away from its previous high-end positioning and enter the broader mass market with affordable products. FF plans to leverage cutting-edge AI and software technologies to make this brand a favorite among users across multiple market segments, while still maintaining its technological advantages in the ultra-luxury segment.

In other words, many of the core technologies originally used in the $300,000 FF 91 will be transferred to the second brand. These technologies, once exclusive to top-end luxury vehicles, will now be applied to more affordable cars.

Matthias, Faraday Future's global CEO, also introduced the company's strategic plan: "We will focus on the price range of $20,000 to $80,000."

From $20,000 to $80,000, that's roughly equivalent to 140,000 to 570,000 yuan in Chinese currency.

In fact, this price range spans quite widely, covering the mid-to-high-end market. It's unrealistic to rely solely on one model, so it's highly likely that the second brand will introduce multiple new vehicles.

Jia Yueting also stated that next year, through FF's value proposition, Chinese cars will be brought to American users. Furthermore, FF plans to integrate the technology of the American automotive industry with the robust supply chains of Chinese OEMs and component suppliers to achieve resource sharing.

However, given Faraday Future's current difficulties in delivering new vehicles, it may struggle to generate sufficient revenue to sustain its operations.

A crucial question remains: Is there enough money left for R&D on the second brand?

02 Manufacturing and delivery are major issues

Faraday Future's latest financial report shows that in the second quarter of this year, revenue reached $293,000, with operating losses narrowing from $55.979 million in the same period last year to $50.609 million, and net losses of approximately $109 million.

In the first half of 2024, Faraday Future generated cumulative revenue of $295,000, with net losses of $157 million (approximately RMB 1.1 billion), down from a net loss of $270 million in the same period last year.

As of June 30, the company's total assets were approximately $458 million, with total liabilities of approximately $309 million (approximately RMB 2.2 billion), resulting in net assets of approximately $149 million. Cash used in operating activities was reduced to only $29.1 million (RMB 208 million), with ending cash flow at $1.377 million.

However, in the second quarter, Faraday Future raised approximately $15.5 million through convertible notes financing.

Looking back at Faraday Future's decade of vehicle manufacturing, it has delivered 13 FF 91 vehicles, six of which were leased out. Apart from Jia Yueting purchasing one for himself in 2023 and delivering three more that year, there have been no further deliveries.

From January to June this year, a transportation service company founded by Academy Award winner Morgan Freeman purchased one FF 91 to provide VIP chauffeur services, and an individual investor named He Jun also bought one, contributing to Faraday Future's sales revenue for the first half of the year. The last new car was purchased by Gao Wei, FF's Global Communications and Community Sales Director, in August this year.

It is worth mentioning that in March this year, Faraday Future recalled all 11 previously delivered FF 91 vehicles, citing a malfunction with the airbag warning light. If the airbag malfunctions, the software system error may fail to activate the warning light, posing a potential threat to the driver's safety.

This year, Faraday Future has continuously faced news of rent arrears and factory sales, and its stock has received a delisting notice from Nasdaq due to closing prices below $0.10 for ten consecutive trading days. Jia Yueting had to ease financial pressure through the commercialization of his personal IP.

Due to a shortage of funds to purchase components, Faraday Future went four months without delivering any new vehicles. After restarting the second phase of FF 91 deliveries (SOD2), Jia Yueting expressed his commitment to delivering one new vehicle per month.

In addition, Jia Yueting has a special fondness for the Middle East. Recently, FF appointed Mo Cuitian as the head of the UAE market. Previously, he led FF's global user ecosystem team, encompassing brand and market communication, O2O sales and after-sales service, user operation strategy formulation and execution, and the establishment of an ecological O2O direct sales system.

With this appointment, Faraday Future aims to expand its partnerships in the UAE and the Middle East, leading strategic financing, business development, sales, and marketing efforts, as well as potentially implementing the China-US auto industry bridge strategy in the region in the future.

In November last year, FF held the "FF Middle East Strategy" event in Abu Dhabi, the capital of the UAE, and announced strategic cooperation agreements with Master Investment Group and Siraj Finance LLC. In April this year, FF announced the establishment of a Middle East sales entity in Dubai.

It is understood that FF plans to launch a limited-edition model, the FF 91 2.0 Futurist aiFalcon, tailored specifically for the Middle East market, with deliveries to users in the region scheduled to begin this year.

According to Jia Yueting's plan, Faraday Future aims to compete with traditional super-luxury brands and disrupt the traditional luxury automotive culture, similar to Rolls-Royce, Ferrari, Bentley, and Maybach.

However, the higher one stands, the greater the risk. Jia Yueting still has over RMB 10 billion in unfulfilled judgments, making his promise of "returning to China next week" seem increasingly unlikely.

Judging from the difficulties in delivering new vehicles and financial data, the birth of FF's second brand may be straightforward, but how to manufacture and deliver it could be the biggest challenge.