8-K: Faraday Future Secures New Pre-Order for 300 FX Super One MPVs from Sky Horse Auto

Faraday Future announces a binding pre-order agreement with Sky Horse Auto for 300 units of its FX Super One MPV, including a $30,000 non-refundable deposit.

Summary

• Faraday Future has secured a binding business-to-business (B2B) pre-order agreement with Sky Horse Auto LLC for 300 units of its FX Super One MPV.
• The agreement includes a $30,000 non-refundable deposit.
• Sky Horse Auto, a California-based mobility solutions provider, plans to integrate the FX Super One MPVs into its premium fleet for leisure and business travelers.
• The vehicles will be deployed across key West Coast markets, including Orange County, Los Angeles, San Francisco, and Las Vegas.
• Faraday Future anticipates the first FX Super One vehicles to be off the line by the end of 2025.
• The company is targeting tens of thousands of FX vehicle sales within two years of production, contingent on securing necessary agreements and funding.
• This new order follows a previously announced non-binding pre-order of 1,000 units to a New York City-based automotive dealership.

Sentiment

Score: 7

Explanation: The announcement is positive due to the new pre-order agreement and the potential for future sales. However, the non-binding nature of the pre-order and the company's financial challenges temper the overall sentiment.

Positives

• The binding pre-order agreement with Sky Horse Auto demonstrates market demand for the FX Super One MPV.
• The $30,000 non-refundable deposit indicates a commitment from Sky Horse Auto.
• The agreement expands Faraday Future's B2B co-creation ecosystem model.
• Sky Horse Auto's deployment plans target key West Coast markets, providing exposure for the FX Super One MPV.
• The FX Super One MPV is positioned as an affordable mass market EV with a focus on passenger comfort and advanced technology.

Negatives

• The pre-order is non-binding, meaning Sky Horse Auto is not obligated to purchase all 300 units.
• The targeted sales of tens of thousands of FX vehicles within two years are subject to securing necessary agreements and funding, which introduces uncertainty.
• The company's ability to achieve its production and sales goals depends on various factors, including securing necessary agreements, funding, and permits.

Risks

• The number of vehicles that Sky Horse Auto LLC ultimately chooses to purchase from the Company may be as few as one.
• Market demand for MPV rentals, particularly in Southern California, may not meet expectations.
• The company's ability to secure the necessary funding to execute on its AI, EREV and Faraday X (FX) strategies is uncertain.
• The company's ability to design and develop EREV technology and AI-based solutions is subject to risks and uncertainties.
• Competition in the AI and EREV areas, where actual or potential competitors have or are likely to have substantial advantages relative to the Company, including but not limited to experience, expertise, funding, infrastructure and personnel.
• The company's ability to secure necessary agreements to license third-party range extender technology and/or license or produce FX vehicles in the U.S., the Middle East, or elsewhere, none of which have been secured.
• The company's ability to homologate FX vehicles for sale in the U.S., the Middle East, or elsewhere is uncertain.
• The company's ability to secure necessary permits at its Hanford, CA production facility is subject to risks.
• The company's ability to continue as a going concern and improve its liquidity and financial position is uncertain.
• The company's ability to pay its outstanding obligations is subject to risks.
• The company's ability to remediate its material weaknesses in internal control over financial reporting and the risks related to the restatement of previously issued consolidated financial statements is uncertain.
• The company's limited operating history and the significant barriers to growth it faces pose risks.
• The company's history of losses and expectation of continued losses is a risk factor.
• The success of the company's payroll expense reduction plan is uncertain.
• The company's ability to execute on its plans to develop and market its vehicles and the timing of these development programs is subject to risks.
• The company's estimates of the size of the markets for its vehicles and cost to bring those vehicles to market may be inaccurate.
• The rate and degree of market acceptance of the company's vehicles is uncertain.
• The company's ability to cover future warranty claims is a risk factor.
• The success of other competing manufacturers may negatively impact the company.
• The performance and security of the company's vehicles is subject to risks.
• Current and potential litigation involving the company poses risks.
• The company's ability to receive funds from, satisfy the conditions precedent of and close on the various financings described elsewhere by the company is uncertain.
• The result of future financing efforts, the failure of any of which could result in the company seeking protection under the Bankruptcy Code, is a risk factor.
• The company's indebtedness poses risks.
• The company's ability to use its at-the-market program is uncertain.
• Insurance coverage may not be adequate.
• General economic and market conditions impacting demand for the company's products pose risks.
• Potential negative impacts of a reverse stock split is a risk factor.
• Potential cost, headcount and salary reduction actions may not be sufficient or may not achieve their expected results.
• Circumstances outside of the company's control, such as natural disasters, climate change, health epidemics and pandemics, terrorist attacks, and civil unrest, pose risks.
• Risks related to the company's operations in China are present.
• The success of the company's remedial measures taken in response to the Special Committee findings is uncertain.
• The company's dependence on its suppliers and contract manufacturer poses risks.
• The company's ability to develop and protect its technologies is uncertain.
• The company's ability to protect against cybersecurity risks is a risk factor.
• The ability of the company to attract and retain employees is uncertain.
• Any adverse developments in existing legal proceedings or the initiation of new legal proceedings pose risks.
• Volatility of the company's stock price is a risk factor.

Future Outlook

Faraday Future is targeting tens of thousands of FX vehicle sales within two years of production, subject to securing the necessary agreements and funding. The FX Super One is anticipated to be unveiled in June of 2025, and expects to start collecting non-binding paid reservations thereafter. Development of the second and third potential FX models is also progressing.

Management Comments

• 'Securing another B2B reservation order in another geographic region in a matter of weeks is a clear indication that we're addressing an unmet need in today's AIEV MPV market,' said YT Jia, Founder and Co-Global CEO of Faraday Future.
• 'Sky Horse is a young and growing mobility solutions provider that we are eager to support,' said YT Jia.
• 'We are both proud and excited to assist them with helping them grow their fleet and business with cutting edge and innovative vehicles that will serve their clientele with the utmost in comfort, innovation, technology, performance and with the quality and reliability they have come to expect with their entire fleet,' said YT Jia.
• 'Our international customers are increasingly demanding high-end, sustainable mobility solutions, and the FX delivers not only on performance and innovation but also on environmental responsibility,' said Stephen Kuo, CEO of Sky Horse.
• 'We are confident that integrating the FX into our fleet will set a new standard for luxury travel and position Sky Horse at the forefront of next-generation mobility,' said Stephen Kuo.

Industry Context

This announcement reflects a growing trend in the electric vehicle industry towards B2B partnerships and fleet sales. Companies are increasingly targeting mobility solutions providers and fleet operators to drive adoption of their electric vehicles. The focus on multi-purpose vehicles (MPVs) also aligns with the increasing demand for versatile and spacious vehicles for both personal and commercial use.

Comparison to Industry Standards

• Tesla has successfully implemented a direct-to-consumer sales model, while Faraday Future is focusing on a B2B co-creation ecosystem model.
• Rivian has secured significant fleet orders from Amazon for its electric delivery vans, demonstrating the potential of B2B partnerships in the EV market.
• Traditional automakers like Mercedes-Benz and BMW are also investing in electric MPVs, indicating the growing demand for this vehicle segment.
• The targeted price range of $20,000 to $40,000 for affordable AIEVs is competitive with other mass-market EVs, such as the Nissan Leaf and the Chevrolet Bolt.

Stakeholder Impact

• Shareholders may react positively to the news of the pre-order agreement.
• Employees may be encouraged by the company's progress in securing new business.
• Customers may be interested in the FX Super One MPV as a potential mobility solution.
• Suppliers may benefit from increased production of the FX Super One MPV.
• Creditors may view the pre-order agreement as a positive sign of the company's financial prospects.

Next Steps

• Faraday Future will continue to develop and market the FX Super One MPV.
• The company will work with Sky Horse Auto to integrate the vehicles into its fleet.
• Faraday Future will continue to seek additional B2B partnerships and pre-orders.
• The company anticipates unveiling the FX Super One in June 2025 and starting to collect non-binding paid reservations thereafter.
• Development of the second and third potential FX models is also progressing.

Key Dates

Keywords

Faraday Future, FX Super One MPV, Sky Horse Auto, pre-order, electric vehicle, B2B, mobility solutions, AI, EREV