J Capital Research Limited, an American short-selling agency, on October 7 released a report on new energy vehicle company Faraday Future (FF). Through on-site investigation, analysis of FF’s financial report and technical capabilities, and research of capital operations after the firm’s listing, J Capital Research bluntly holds a negative attitude in the report, claiming it doesn’t think “FF could sell even one car.”
“After eight years of operation, FF failed to deliver one car and again, postponed to ‘delivery in next year’. In addition, FF violated its commitment to build factories in five cities across the United States and China, and repeatedly postponed the construction of its sixth factory,” J Capital Research said in the report.
The research said that on September 20 of this year, FF released a report saying that it had made progress in manufacturing. However, the former engineering director of FF interviewed by J Capital Research did not think that FF are ready to produce EVs.
In addition, FF previously promised to restart its manufacturing plant in Hanford, California, USA within seven months and produce EVs on a large scale. But J Capital Research pointed out in the report that it visited the factory three times from August to September and found basically no action. An FF executive also admitted there remained engineering issues to be addressed.
On July 22, FF was officially listed on the Nasdaq through an SPAC. J Capital Research suggests in the report that according to FF’s public documents, it requires another $1.4 billion in cash to achieve its financial goals in 2024, which may lead to further dilution of investors’ equity after large-scale fund-raising and debt-to-equity swap. J Capital Research also doubts the possibility of investors lending to FF.
FF’s official website shows that Jia Yueting serves as founder, partner, and chief product and user ecosystem officer at the firm. In the report, J Capital Research goes through the penalties and lawsuits involving Jia and related companies in China. In July, LeTV Automobile (Beijing) Co., Ltd., a subsidiary of FF, was forced to take actions by the court, with a subject matter of execution totalling 30 million yuan ($4.65 million).