Cash-strapped EV startup Faraday Future Intelligence Electric FFIE has recently made a strategic move by exercising its option to purchase its manufacturing facility in Hanford, California. Simultaneously, the company completed a sale-leaseback arrangement, injecting up to $12 million of non-dilutive capital to support ongoing plant improvements and infrastructure enhancements.
Move’s Motive: The goal is to facilitate increased production capacity further, the company said, particularly for the upcoming FF 91 2.0 Futurist Alliance.
The Hanford manufacturing facility, once fully built out, is expected to possess the capacity to produce approximately 10,000 vehicles annually.
Matthias Aydt, the Global CEO of FFIE, said, "This agreement will help us make the necessary continued investments and improvements to the Hanford plant that will facilitate increased production and deliveries of the FF 91 2.0 Futurist Alliance."
One of the key highlights of this transaction is its non-dilutive nature, as no additional shares will be issued.
“In this transaction, we did not sell any physical assets. We were leasing Hanford previously and have now simply changed landlords,” Faraday clarified on social media.
Why It Matters: Earlier this week, Faraday Future outlined a “master plan” to achieve financial stability without relying much on external funding. The plan primarily focuses on cost reduction by cutting non-essential expenses not linked to producing the FF 91 2.0 Futurist Alliance SUV.
In the second quarter, Faraday reported no revenue but accrued a net loss of $124.9 million. As of June 30, 2023, the company's cash reserves amounted to $19.4 million, including $1.5 million in restricted cash.
Price Action: Shares of Faraday Future closed down 0.85% on Thursday at $1.17, according to data from Benzinga Pro.
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Image courtesy: Faraday Future
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