Almost got kicked out of headquarters! Facing delisting, Jia Yueting is still 'expanding'

Suing HiPhi, blasting Xiaomi.

Jia Yueting's car-making venture has completely become a laughingstock.

Previously, Faraday Future announced its first recall plan, covering all FF91 vehicles produced last year, totaling just 11 units.

The recall was reportedly due to a malfunction in the airbag warning light.

In other words, after a decade in car manufacturing, Jia Yueting has only delivered 11 vehicles, one of which was owned by Jia himself.

From the current global market perspective, the challenge for new energy vehicle companies is no longer production capacity but overcapacity. Therefore, entering 2024, the keyword for global new energy vehicle companies will shift from "fierce competition" to "survival of the fittest," meaning those companies that haven't achieved mass production will face even harsher tests.

As is well known, car manufacturing is a highly risky capital-intensive project. The mass production phase consumes enormous amounts of capital, and companies with insufficient financial reserves can easily fall behind or even exit the market.

Due to weak supply chain control during mass production, most new energy vehicle companies inevitably lose money on every car sold.

Historically, expanding from high-end to low-end models is generally a sound strategy, but the prerequisite is that the high-end models must gain market traction—something Jia Yueting failed to achieve. More importantly, the FF91's price tag of 2 million yuan (approx. $280,000) makes it unlikely to attract large orders.

Before FF91 deliveries began, Faraday Future claimed to have secured 300 pre-orders. Now, it appears this was merely a marketing stunt.

In reality, "cash-strapped" has been the recurring theme for Faraday Future throughout Jia Yueting's car-making journey.

Recently, it was reported that Faraday Future was sued by its landlord for nearly $1 million in unpaid rent for its headquarters. The company later reached an agreement allowing continued use of the premises under certain conditions.

This marks the second time Faraday Future has been sued for unpaid rent.

According to sources, Faraday Future must pay $305,000 by April 15 to continue occupancy and prepay $312,000 for June rent by May 6. Failure to meet these deadlines could result in eviction by Rexford Industrial.

Faraday Future responded to media inquiries, stating, "The parties have reached a settlement, but the specifics are confidential."

Kan Jian Finance believes that for a carmaker struggling to pay a few million in rent, continued operations and deliveries are a "hell-level" challenge.

Even worse, Jia Yueting's Faraday Future is teetering on the brink of delisting.

Recently, Faraday Future disclosed receiving a Nasdaq notice on December 28 regarding potential delisting due to non-compliance. The stock had traded below $1 from November 9 to December 27, violating listing rules.

Per Nasdaq rules, Faraday Future has 180 days—until June 25, 2024—to restore its share price above $1 for at least 10 consecutive days. Failure would trigger delisting.

Despite this, Faraday Future continues to project an expansionist facade.

On April 9, the company announced establishing a Middle East sales entity in Dubai, with plans to deliver a limited-edition FF91 this year. Faraday Future framed this as a "key milestone" in its global strategy, targeting premium markets in China, the U.S., and the "third pole."

Regarding Faraday Future and Jia Yueting's predicament, we believe a major capital infusion is their only lifeline.