What happened

Shares of electric vehicle start-up Faraday Future Intelligent Electric (FFIE -4.08%) plunged Tuesday after the company made several announcements regarding its financial condition and its plans for beginning vehicle deliveries. 

Faraday shares dropped more than 35% in early trading and remained down by 33.8% as of 1:50 p.m. ET. 

So what

On Friday, Faraday put out a press release to announce it was delaying initial deliveries of its high-performance FF 91 EV. It also indicated it would perform two maneuvers to help it attract potential new investors and capital in the future. Faraday proposed a reverse stock split in the range of 1-for-2 and 1-for-90 shares to allow it to remain listed on the Nasdaq stock exchange. The proposal will have to be approved by Faraday shareholders, after which the board will decide on the ratio for the reverse split. 

The company also said it may issue additional shares of common stock to raise up to $300 million in capital.  

Now what

Faraday shares have lost almost 90% of their value in the last year, leaving them well below the $1 minimum level for a stock to avoid being delisted from the Nasdaq exchange. During that time, the company struggled to garner enough capital to initiate vehicle production. It secured $135 million by issuing convertible secured notes in February, but more money will be needed as it works to deliver its first vehicles and grow production from there. 

Faraday had hoped to present its first vehicles to select buyers by the end of this month, but now says that won't happen until August due to supplier delays and the need for additional testing. Shipments are then scheduled to expand to all reservation holders after the first delivery phase. 

While Faraday didn't commit to raising the additional capital it requires through common stock offerings, it seems likely that it will need further financing. Between delivery delays and additional stock dilution likely in the future, it's not surprising to see some investors throw in the towel by selling Faraday stock Tuesday.