When you make a bed as spacious, luxurious and mobile as the FF 91, it's inevitable you'd want to sleep in it, right? That's what Faraday Future is doing, but not the way it intended. The eight-year-old-yet-still-nascent EV automaker spent the first quarter livestreaming the launch of the production FF 91, then wrangling with the U.S. Securities and Exchange Commission (SEC) over inaccurate statements about the number of reservations it had for the FF 91. Previous claims alleged 14,000 reservations, the expectation among outsiders being that people had put down $5,000 to secure the premier Futurist Alliance Edition trim or put down $1,500 to bag the slightly less frilly Futurist trim. Thanks to financial reports for the first quarter, we now know the actual number is 401 reservations. Seems that the 14,000 figure was a measure of "indications of interest," otherwise known as hand-raisers, and didn't involve money changing hands.
This is the part where startups learn, publicly, that making cars is hard. Even Tesla had its moments, and plenty of them, but they seem so long ago. Compare Faraday Future's order book with the 200,000 reservations for the Ford F-150 Lightning, the Cadillac Lyriq's intended production run being sold out for the 2022 and 2023 model years, and Volkswagen and Mercedes-Benz admitting they can barely keep up with EV demand.
Making cars is also heinously expensive. Faraday Future is making the appropriate steps to get its first model into production later this year at its plant in Hanford, California. The price of that march to Job One is a cumulative $3 billion loss since the whole adventure began. The net loss in Q1 of 2022 came to $153 million, compared to $76 million in Q1 last year; the Q1 operating loss being $149 million as opposed to $19 million in Q1 last year. We're told the budget ballooned due to development costs, employee costs, and design and testing services. The outfit has $706 million in total assets, of which $276 million is cash, a bright spot considering total liabilities only come to $271 million, which is down from $340 million at the start of the year. Investors, who should be versed in this dance by now, have been warned that the good times are well down the road behind a painful slog known as "significant" losses.
With its freshly printed dealer and distributor license provided by California, Faraday Future is clear to sell vehicles online throughout most of the country. If it can coax 5% of those reservation holders into FF 91 buyers at a rumored MSRP of around $180,000, that will get 20 cars on the road. A 10.5-year lease on a storefront in Beverly Hills, California, will put more eyes on the product in an area where dropping six figures on a new toy is just something you do between the mid-morning personal training session and lunch. There's also a signed contract to get the second product into production by 2024, the "high-volume" FF 81 that will be built by South Korea's Myoung Shin. That might as well be another dimension, though. Beginning, ramping up and maintaining production in the current climate by Q3 will take everything the company has.