Today, Faraday will announce its results for the first quarter of 2023. According to the financial report, FF's first-quarter net income was $6.5 million and its quarterly loss was $153.1 million. Operating expenses for the first quarter were $83 million, down from $149 million in the same period last year; net cash for operating activities was $103.2 million, compared with $122.4 million in the same period last year; and capital expenditure was $16.9 million. On the balance sheet, as of March 31, 2023, FF had $33 million in cash, including $1.5 million in restricted cash.
According to FF, the change in operating expenditure is mainly due to the reduction in engineering, design and testing services ("ED&T"), which basically completed the R & D activities related to FF 91 in 2022 and focused on the start-up production-related capitalization activities agreed on March 29, 2023, accompanied by the company's cost reduction measures, including personnel, compensation and professional services, and the conclusion of the Special Committee investigation.
It is worth noting that in addition to the first-quarter results, FF also released a letter to shareholders. Officials say the delivery of FF 91 is still on schedule with the three-phase delivery plan, according to the letter. It is expected that some of the initial production will be used for sales and marketing activities to meet user needs. In terms of cost, we will continue to improve efficiency and reduce material costs. At present, a detailed cost reduction roadmap for engineering and business costs has been developed. In terms of financing, officials say they have successfully raised a total of $135 million to support the SOP and production plans of the products.
Officials say a total of $120 million has been received so far. There is also an unused $350 million equity credit line, which will strategically consider the use of equity credit lines to minimize dilution. At the same time, we will continue to explore opportunities for asset financing. On the outlook for the future, officials said: the goal is to become a profitable company and achieve operating cash flow balance by 2025.
In addition, FF revealed in a conference call with Q1 investors that the first phase of FF 91 delivery will begin at the end of May. At this stage, the compliance certification of FF 91 is proceeding as planned, and most of the tests have been successfully completed, of which the most difficult collision subjects have been carried out and successfully passed, including the front, side and rear collision tests of the vehicle. FF is working hard on production climbing, with the goal of providing the company's users with the highest quality FF 91 vehicles as soon as possible. To date, FF has produced 40 vehicles for engineering, testing, marketing and users, and has built all the vehicles needed for FMVSS testing.
Related information shows that FF 91 is the first model of Faraday in the future, positioning high-end luxury electric vehicles, the standard Maybach S-Class, Porsche Taycan, BMW 7-Series and so on. The car first made its global debut in Las Vegas in January 2017. since then, due to a shortage of funds, the FF 91 was not mass produced until April this year. However, due to funding problems, officials also announced in April that the delivery of the first model would be delayed and that the delivery of FF 91 vehicles would be divided into three stages. The first phase is "Industry expert futuristic Product Officer (FPO) Co-creation delivery", which is expected to begin at the end of May. At this stage, industry expert FPO needs to pay FF91 in full and receive training in the use of vehicles. The second stage is "FPO co-creation delivery", in which FPO needs to pay FF91 in full and get the FF91 vehicle. The third phase is "Comprehensive Co-creation delivery", which will deliver FF 91 vehicles to all spire users who pay the full cost of FF 91 vehicles. With regard to the delivery plan, officials said that a large amount of additional financing is expected to be required to begin the second and third phases of delivery, and discussions are under way with other potential investors. the three-phase delivery plan depends on the timely receipt of sufficient funds and spare parts and the completion of the required collision tests.
In fact, there has always been a "cash crunch" about FF. Since Jia Yueting established Faraday and announced his march into car building in the future, it has been accompanied by the problem of shortage of funds. Related data show that Faraday's future net losses reached $142 million, $147 million, $517 million and $552.1 million respectively from 2019 to 2022. In order to realize its dream of building a car, Faraday has made a cumulative loss of US $1.3581 billion over the next four years.
The net loss is great, but Faraday's financing ability is also very strong in the future. even if the first model is not produced for a long time, it can still be favored by capital and increase its capital one after another. On May 10th, FF officially announced that it had completed a $100m financing, led by senior partners as cornerstone investors. Judging from the current official release, with the availability of financing funds, Faraday's confidence in the future is also full.
However, whether the delivery phase of FF91 can be carried out successfully or not is still a bit of a suspense. After all, with reference to Faraday's past loss rate in the future, FF's current capital reserves are still very scarce. In addition, the vehicle mass production time has been changing for a long time due to the shortage of funds, even if it can be mass production smoothly, it is still very difficult to be recognized by the market in a short time. From a market point of view, Tesla, an American new energy car company, has occupied most of the market share, and there are still new car-building forces in China that have occupied part of the market share. Under the background of such a "separation of heroes", it may be very difficult for FF to get a place, and the road to a turnaround is not easy.
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