Faraday Future Going Public Via SPAC: What Investors Should Know

Luxury electric vehicle brand Faraday Future is going public with a SPAC merger announced Thursday.

The SPAC Deal: Faraday Future is going public with Property Solutions Acquisition Corp PSAC in a deal that values the company at $3.4 billion.

The deal will give Faraday Future over $1 billion in proceeds that are expected to fund its operations to bring the FF91 vehicle to market within 12 months of the second-quarter 2021 merger close.

A $775-million PIPE includes investments from a Top 3 Chinese OEM (Geely) and a Tier 1 city in China. The PIPE includes over 30 institutional investors from China, Europe and the United States.
The new company will trade on the NASDAQ as "FFIE."

Current Property Solutions Acquisition shareholders will own 6.8% of the new company.

About Faraday Future: The electric vehicle maker has a unique I.A.I. system — internet, autonomous driving and intelligence.

Faraday Future says it's the world’s only technology luxury intelligent internet-based electric vehicle brand. The company plans on selling over 400,000 vehicles in the next five years. The FF91 has over 14,000 reservations.

Related Link: EV Maker Faraday Future Looks To Raise $400M Through Merger With SPAC Company

Growth Ahead: The FF91 has 378 miles in range and comes with an industry-leading 1,050 horsepower. The vehicle can go from zero to 60 mph in 2.4 seconds, nearly outpacing the Model 3 from Tesla Inc TSLA.

The FF91 is focused on luxury and includes the industry’s first 17-inch front passenger screen and an industry-leading 27-inch rear passenger display.

The FF91 has industry-leading leg room and a rear seat reclining angle of 60 degrees, the company said. 

The FF91 will compete with luxury brands and not directly with Tesla vehicles. The FF91 has a starting price point of $180,000.

The FF81 (2023) and FF71 (2024) have future prices of $59,000 and $45,000. They're planned as mass market vehicles that could compete with Tesla.

A joint venture is expected to help Faraday Future grow its presence in China in the future. Geely sold over 2 million vehicles in 2019 and will help Faraday Future with manufacturing.

The company has a 1.1-million-square-foot manufacturing facility that will be able to produce 10,000 vehicles. Additional contract manufacturing in South Korea will provide capacity for the production of 270,000 vehicles annually. Chinese manufacturing is also in the works.

Faraday Future will sell vehicles online and in self-owned stores that will focus on top 20 cities in the U.S., Europe and China.

Financials: The company expects to sell 2,400 vehicles in fiscal 2022, generating $504 million in revenue. Manufacturing ramp-ups and additional models will significantly improve the unit sales and revenue estimates.
In fiscal 2024, Faraday Future estimates 105,300 vehicle unit sales and 8,000 smart last-mile delivery vehicle sales generating an estimated $10.6 billion in revenue.

Fiscal 2025 estimates call for 266,800 vehicle sales, 35,000 smart last-mile delivery vehicle sales and $21.4 billion in revenue.
The SPAC deal values Faraday Future at 0.2x 2024 revenue and 2.9x 2024 estimated EBITDA of $914 million.

Price Action: Shares of Property Acquisition were up 20.03% at $15.60 at last check Thursday. 

Photo courtesy of Faraday.