Jia Yueting fell and Faraday was full, what are the highlights of the new FF listing?
The pictures in this article are from the Internet
Boss Jia, who has been stuck in building a ppt car, was finally unwilling and unwilling to give up suffocating his dream. From the marriage with Evergrande, to the capital injection of the ninth city , to the launch of the SPAC case, FF is like a gold swallowing beast. Normally, I can’t get enough.
But capital’s madness for new energy vehicles once again exceeded public expectations!
The debt-laden Faraday Future unexpectedly “resurrected” again and returned to the public eye by listing on the Nasdaq.
At this moment, Faraday Future will start again, so what is the probability of its success?
01 Jia Yueting and FF, decoupling
You know, Faraday Future (hereinafter referred to as FF) is no longer Jia Yueting’s company.
On July 2, 2020, Jia Yueting published an open letter on his personal Weibo titled “Working and Entrepreneurship, Restarting Life, With My Apologies, Thanksgiving and Commitment”, stating that he has completed his personal bankruptcy and reorganization process in the United States , The current restructuring plan has officially taken effect, and a creditor trust has also been established and officially started operations.
In the letter, he wrote:
“With the implementation of the FF partnership system and the entry into force of my personal bankruptcy reorganization plan, I no longer own the equity in FF”;
“For all my creditors, everyone will share the success of FF in the future as FF shareholders”;
“FF will be the FF of all partners and all employees, and it will also be the FF of investors and creditors and shareholders.”
According to Jia Yueting’s debt restructuring plan, he used his own FF company equity and related income rights as trust property, with creditors as beneficiaries, and used a method similar to “equity transfer” to release his debts.
The trust property of creditors is FF’s equity and its income rights. In other words, only when the company is running well and the stock price rises accordingly, the creditors who are the beneficiaries of the trust have a chance to obtain higher repayment.
In this way, both the trustee and the partners will strongly support the development of FF and try their best to safeguard their own interests.
In addition, Jia Yueting FF is no longer the CEO, and into the chief product and user operating officer, CEO post will be given to the completion of Fukang (Carsten Breitfeld), who served as the BMW Group Vice President and plug-in hybrid vehicles The person in charge of the i8 project and the CEO of Byton Electric Vehicle, a new force in car manufacturing.
According to the S-4 revised document submitted by PSAC on June 21, after the merger of PSAC and FF, Evergrande Group subsidiary Hong Kong Shiying (Season Smart Limited) will own 20.4% of the new FF; the new FF will also Received 1 billion US dollars of capital injection to provide capital guarantee for mass production of FF91 models.
02 Mass production is king
With 1 billion as a guarantee, will FF energy production go offline?
Burning money is a common feature of almost all new forces making cars, and the auto industry is inherently a capital-intensive industry.
But wealth does not mean energy production. To successfully launch a car, we must first solve the problem of capacity ramping. Many electric vehicle start-ups such as Tesla and “Wei Xiaoli” have been constrained by insufficient capacity.
Although it is currently seen that Tesla’s global car factory capacity can reach 1.05 million vehicles per year, the 500,000 vehicles/year plant in Fremont, USA is not built by Tesla itself, but from Toyota at the beginning of the business. Acquired by hand.
At that time, the Toyota and GM joint venture plant (NUMMI) mainly produced Chevrolet and Toyota Corolla cars, but when the economy began to decline in 2008, GM fell into a financial quagmire and abandoned the plant in 2009, and Toyota also soon Announcing the closure of the factory.
Lucky Musk only included the factory at a low price of US$42 million (Toyota initially bid 100 million) to get the factory in. This solves the worry about production capacity at the time, and the factory has a large number of ready-made production equipment and 5,000 skilled workers. It provides a powerful boost to Tesla’s rapid mass production of the Model S concept car.
The three domestic “Wei Xiaoli” companies chose the foundry model in the early stage of their business. “Wei Xiaoli” is a new recruit in the car manufacturing industry. First, it has zero experience in the industry. Second, it is difficult to apply for car manufacturing qualification. It is undoubtedly the best solution to find other car manufacturers.
On December 6, 2018, the Ministry of Industry and Information Technology issued the “Administrative Measures for the Access of Road Motor Vehicle Manufacturers and Products”, allowing R&D and design companies that meet the prescribed conditions to borrow the production capacity of production companies to apply for access, and solve the problem of new forces’ vehicle manufacturing capacity. Wei came to JAC and Xiaopeng to choose Haima and ideally bind Lifan.
At present, the production capacity of the Jianghuai Weilai plant is 120,000 vehicles per year, and it is still expanding. It is expected to reach a capacity of 150,000 per shift and 300,000 double shifts by the end of the year. Xiaopeng and Ideal have chosen to build their own factories or directly purchase OEMs after their car sales reached 30,000. It is reported that Xiaopeng has 4 factories with a total annual production capacity of 470,000 vehicles; Ideal Changzhou’s annual production capacity is also expected to be in Doubled to 200,000 vehicles in 2022.
Foundry and low-cost acquisition of ready-made factories are both ways to accelerate mass production. However, when FF was founded, it chose a particularly difficult road. It built its own factory from scratch, and even went to Nevada, USA. On a desert in Vegas.
How can the United States build factories efficiently and quickly in China, and the labor costs are also expensive. As a result, the factory was not built, but it was in debt.
In 2018, FF abandoned its Nevada plant and went to Hanford, California to build a plant with an annual production capacity of 10,000 vehicles. But so far, $ 9 million short of the plant’s construction costs, such as money to the site, but also to nine months to be completed.
Fortunately, this time FF found two helpers to promote mass production of cars. The first is Korean company Myoung Shin. The plant is located in Gunsan City, South Korea and has an annual production capacity of 270,000 vehicles. Myoung Shin has rich experience in manufacturing automobiles. According to public information, the factory was originally produced by Byton, but when the latter was on the verge of bankruptcy, it switched to FF service.
The other is Geely . On January 29 this year, FF and Geely signed a framework cooperation agreement, planning to cooperate in the field of technical support and engineering services, and to explore the possibility of providing foundry services by the joint venture between Geely and Foxconn .
It is worth mentioning that Zhejiang Geely Holding Group Co., Ltd. participated in a small amount of investment in the listing of FF SPAC, and plans to establish a joint venture with FF in a certain tier city (Tier 1) in China to support the latter to set up headquarters and production in China.
03 Is it too late?
From this point of view, FF’s brave entry into the capital market this time is no longer as “naked” as before, but is it too late to enter the market now?
Up to now, FF is still a car that has not been mass-produced. The official website of FF shows that the futurist version of FF91 has been booked with a deposit of 50,000 yuan. According to the listing documents, the price of the whole car should be 180,000 US dollars, or 115. Ten thousand yuan (converted at 1USD=6.4CNY).
The performance of the car is no less than that of other brands of high-quality new energy vehicles, but this price will undoubtedly turn away most consumers. According to the product information in the PSAC listing document, the more friendly models FF81 and 71 will have to be launched around 2024 at least.
Simply sorting out the road map of FF passenger car models, it is not difficult to find that FF is benchmarking Tesla, slowly penetrating from the high-end to the mass market.
But according to Tesla’s development path, the real explosion started with Model 3. Model3 is a medium-sized sedan. It was announced in March 2016 and delivered at the end of 2017. The standard version is 35,000 US dollars and has a range of 354 kilometers. It is very cost-effective.
M3 has become a phenomenon-level product. In 2018, 140,000 vehicles were delivered, accounting for 38.7% of the sales of new energy vehicles in the United States. Tesla’s annual revenue reached 21.46 billion U.S. dollars, and its net profit was 1.96 billion U.S. dollars in loss from 2017. Narrowed to a loss of US$980 million. As of January 2021, Tesla’s share of the US electric vehicle market has reached 55%.
However, Tesla has not stopped its price cuts, and it has stimulated other new forces to build cars to follow up, and cost-effective models have become the next battleground.
Tesla is expected to launch about 160,000 Model 2 in 2022; Xiaopeng P5 (160,000 ~ 230,000) has been launched in mid-July this year; Weilai will launch the Gemini series of Gemini models, targeting at a price of around 200,000 market.
You know, China’s cars under 150,000 account for 70% of the total sales of all models in China. So far, the replacement effect of new energy vehicles in this part is not high.
All car companies are speeding up the race. In addition to Tesla, Wei Xiaoli, new forces such as Nezha, and Zero Running, new energy brands from traditional car companies such as BYD , GAC Aeon, and SAIC Roewe are also focusing on this part of the market.
The penetration rate of new energy vehicles in my country in 2020 is only 5.42%, but after entering 2021, the penetration rate has risen rapidly. The domestic penetration rate has reached 10% from January to June. There is one new energy vehicle in ten vehicles, which also means With the potential market still broad, it is not too late for FF to enter the market now, but it undoubtedly needs to speed up. When its extremely cost-effective car will be launched and when the energy production will be delivered, it is a big attraction in the future.
PSAC Document Filings (sec.report)
Tianfeng Securities “Sample of Atypical New Forces: What Happened in Faraday Future”
2021 first half-year country’s new energy auto market penetration of 10% – News – Energy News – China Energy Network (china5e.com)
FF91 priced at over 2 million, better than the luxury Bentley, price overwhelm competing products, you will pay for it _ Tencent News (qq.com)
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