What happened
Faraday Future Intelligent Electric (FFIE -6.81%) shares have taken a wild ride over the past six weeks. But the reality of the electric vehicle (EV) start-up's financial and operational situation became more clear after a recent update. That caused shares to tumble nearly 24% earlier today. The stock remained down 21.4% as of 1 p.m. ET.
So what
Earlier this month, Faraday Future said it needed to delay the launch of its high-performance FF 91 vehicle as it works to raise money to fund the vehicle's development. When the EV company reported its second-quarter report just two weeks ago, it said deliveries would be in the third or fourth quarter.
Image source: Faraday Future Intelligent Electric.
In a new update last night, the company said it now expects testing, validation, certification, and delivery to all be accomplished in the fourth quarter. Faraday also reiterated that its current production and ramp plans for the FF 91 are dependent on the company raising more capital. That is likely what has investors selling the stock today.
Now what
Faraday told investors it had less than $50 million in cash and restricted cash on its balance sheet as of Aug. 26. The company added in a statement, "The timing and amount of additional funding raised could impact the timing and rate of our production ramp, which could substantially impact expected production volumes."
Earlier this month, the company said it signed an agreement with institutional investors that provided $52 million in the near term, with the potential for as much as $600 million. Last night's update showed there is still more for Faraday to accomplish before it can be seen as a viable business going forward.
