With the formal approval of the merger vote between Faraday Future (hereinafter referred to as "FF") and American company Property Solutions Acquisition Corp. (PSAC), FF will officially debut on Nasdaq on July 22nd (today) under the stock symbol "FFIE". The deal is expected to provide FF with about $1 billion.

In other words, with the completion of FF's shell listing, the electric car start-up, which has been controversial since its inception and has been on the verge of bankruptcy, is finally back from the dead and is expected to log on to the capital markets for new financing.

However, listing is only the first step in the success of FF, whether it can win the market and whether it can win the favor of investors is still up in the air.

At present, what the market is most concerned about about FF is:

1) does FF have anything to do with Jia Yueting at present?

2) what is the product and technical strength of FF91?

3) can FF91 achieve mass production as soon as possible?

4) what is the current layout of FF in the domestic market?

5) what is the current valuation?

This article will help you learn as much as possible about FF and its flagship product, FF91. At present, the company has cut off the intricate entanglements with Jia Yueting, the new management team is determined to forge ahead, and FF91 products. If the follow-up financing is smooth, capacity construction, FF91 mass production is smooth, the company may achieve self-redemption.

What is the current relationship between FF and Jia Yueting?

Because of Jia Yueting's black history, it is believed that this time the vast majority of media and investors will still treat this enterprise with great prejudice. But it is precisely how big the difference in expectations is, how amazing the potential opportunities are.

Let's review first.FF development timeline：

Jia Yueting founded FF in California in April 2014, which was once the most closely watched electric car start-up after Tesla, Inc..

In 2015, FF began to promote its manufacturing base in Nevada at an estimated cost of $1 billion. The project was suspended in November 2016.

In 2016, FF announced that it had obtained a California autopilot test license.

In early 2017, the FF91, the first mass-produced electric car, shone at CES.In the same year, when the domestic Letv system collapsed, Jia Yueting fled the United States and began to fully dominate the operation of FF and served as CEO.

By the end of 2017, FF had burned up Jia Yueting's 900 million US dollars for capital injection, and the company was in trouble.；

In the first half of 2018, Jia sold 45% of FF for an investment of US $2 billion from Evergrande.But in a short period of 6 months, FF spent its first investment of 800 million US dollars, and Jia asked Evergrande to advance the remaining investment.

At the end of 2018, the contradiction with Evergrande intensified in an all-round way. FF had only $18 million in cash on its account and owed $59 million in payments to suppliers, and began to lay off staff.

On December 31, 2018, FF and Evergrande reached a new agreement.The latter reduces its shareholding to 32% and no longer undertakes the obligation of further investment.；

September 2019Because Jia's personal credit went bankrupt and financing was difficult to push forward.FF announced the appointment of Bi Fukang, former head of BMW i8 project, as the new CEO, completely replacing Jia (who has the false name of chief product and user officer).Jia then filed for bankruptcy reorganization

In July 2020, Jia announced that the bankruptcy reorganization was completed.To repay about $3.6 billion in debtThe court established the assets under Jia's name into a creditor trust (including holding FF shares).The creditor enjoys the ownership and income right of the trust assets.After the completion of the reorganization, Jia no longer holds any FF shares.. At the same time, FF carried out the reform of partnership system, and the decision-making power of the company was transferred from Jia to the partner committee.

Based on the above data, it can be estimated that FF has burned at least $1.7 billion in the car so far.. The current CEO, Bi Fukang, has also said many times that the company has invested nearly $2 billion in research and development of FF911.

Combing the whole timeline, apart from FF91, there is no doubt that the most important point is that FF will finally sever all relations with Jia Yueting in 2020.。

Previously, because the founder and CEO Jia Yueting personal credit bankruptcy, his remarks have been completely unreliable, which greatly hindered the progress of FF financing. In addition, under Jia's control, the company's ownership structure is said to be very complex, which makes FF "do not have the basic conditions to be invested".

It is after cutting off Jia's "cancer" and CEO Bifukang that Faraday will be reborn in 2020 and will be able to restart financing projects and product research and development again.

So when FF is preparing to go public and build a factory in China recently, the media should no longer use Jia Yueting as a FF facade, because the company has nothing to do with Jia.

After the merger, the original shareholders of FF held a total of 50.3%, the subscribers who issued additional shares to raise matching funds held 23.5%, the creditors converted 6.9% of the shares held by shareholders (available for open market trading), and the original SPAC Sponsor held 2.1% of the shares.

Currently, the FF executive team is led by CEO Bi Fukang (father of BMW i8)Members also include SVP Robert Kruse (former global executive director of GM, responsible for research and development of Sandian) and VP Hong Rao (former director of software engineering at Motorola).

Second, can we fight the "new species" of FF91-- cars?

FF unveiled the FF91 at CES in January 2017, which is due toThe avant-garde design and power of science fiction can be called a performance monster, and it has been called "New species" by the media.Made enough gimmicks and exposure at that time.

Super 5-meter long body, B-pillar human-computer interaction function, around the middle of the body "UFOline", front and rear cross matrix LED headlights, opposite door design, FF91 fluid shape design is full of the future.

In terms of interior decoration, FF91 locates the third Internet living space, and its design is inspired by the "zero gravity seat" of NASA research, high-definition central control touch screen, intelligent privacy glass, modular intelligent visual voice interaction system and many other cutting-edge technologies.

In addition to the excellent design concept, whether the FF91 can be played in the end, whether there is hard core technology or not. Simply sort out the following parameter comparison (FF91 data come from roadshow materials, the three models take the optimal value of zero acceleration and range; comparison is limited to SUV models).

FF91 adopts three-motor design and has the highest peak power in the world, with a peak power of 783kW and 1050 horsepower. With a larger body size, the 0-100km accelerates in only 2.4 seconds, surpassing all current mass-produced electric cars. We should know that this is a technical target announced to the public two or three years ago, and it can still be played even today.

As mentioned earlier, when there was plenty of money in the early days, the founding team of FF recruited many great people in the field of American automobile power, so FF91 actually had a strong accumulation of technology in the field of three electric power.

According to the latest roadshow materials, FF91 currently holds 880 patents and focuses on powertrain, battery management system, UI human-computer interaction and ADAS autopilot assist system.

So to sum up the above information, FF91 is definitely a killer, starting at RMB 640000, between NIO Inc. ES8 and Tesla, Inc. Model X, but the product configuration and performance are higher than those of competitors (but autopilot is likely to bring down). Of course, the premise is that it can be produced smoothly in the end.。Although there are many twists and turns, but after investing more than $1 billion, FF finally created this product with high product power and integrity.

In addition, roadshow information revealed that FF also plans to launch lower-threshold models FF81 and FF71 in the future, starting at $59000 and $45000, respectively. The company will also launch a logistics distribution vehicle (expected potential customers are Amazon.Com Inc, Walmart Inc and other companies).

From the point of view of body size, configuration and dynamic performance, FF91 positioning is higher than Tesla, Inc. and NIO Inc.:

FF product planning:

At present, FF91 has obtained 14000 + orders. Through this backdoor listing, FF plans to take the lead in mass production of FF91 at the Hanford plant in California nine months after fund-raising is completed, with a planned annual production capacity of 10,000 units; construction of a South Korean Gunsan plant in 2023 with a planned annual capacity of 270000 units; and 2025 with the help of a joint venture with Geely to achieve 10-25 units of production capacity.

三、Can FF91 achieve mass production as soon as possible?

At present, the industry is still skeptical about whether FF91 can be mass produced as scheduled, because it has repeatedly skipped tickets before. In addition, even ifAfter a smooth listing, $1 billion will arrive, but that doesn't mean FF will be able to accelerate mass production.

In fact, FF's current financial situation is not optimistic. According to the documents submitted by FF, the net loss of FF in the first quarter of 2019, 2020 and 2021 was $142 million, $147 million and $75.525 million, respectively. As of March 31, 2021, there was only $47.525 million in cash on FF's books, and that was the financial position after PSAC provided $100m in debt financing.

According to another report, FF currently employs only 288 people worldwide, most of whom are engaged in research and development, manufacturing and supply chain work. By contrast, Li Auto Inc., which has only the ideal ONE model, had 4181 employees by the end of 2020, almost 14 times the total number of employees of FF.

After listing, with $1 billion in the bill, FF has more money to spend: to make up for previous operating losses, to lay out the distribution system, to buy spare parts, FF91 testing, and to invest in research and development of FF81 and FF71.

According to FF's plan, the delivery time of FF81 and FF71 is 2023 and 2024, while according to the three-year investment cycle of new cars, FF is now at the peak of spending money, and $1 billion is a drop in the bucket for FF.

Even if FF91 is produced as promised next year, whether there will be sales after FF91 production is also an important issue in the current increasingly competitive new energy vehicle market, and the Chinese market is a market that FF can not give up.

四、What is the current layout of FF in the domestic market?

In the era of smart electric power, the Chinese market, which is rich in Internet ecology, is undoubtedly the best soil to cultivate the power of new cars. And FF has already laid out the domestic market.

At the end of last year, a company called French Automobile (Zhuhai) Co., Ltd. was set up in Zhuhai, Guangdong Province. according to enterprise inspection data, the company is wholly owned by FF Hong Kong, which is also FF's other company in China besides French Automobile (Beijing).

In addition to establishing the company, FF is also actively looking for partners in China.In January, FF and Geely jointly announced plans to work together on technology and factories, and to explore the possibility of Geely's joint venture with Foxconn providing contract manufacturing services for FF.

In March, FF announced the appointment of Mr. Chen Xuefeng as CEO of FF China. Chen Xuefeng has worked in Zongshen Automobile, Changan Ford Mazda, Ford and Chery Jaguar Land Rover. After joining him, he will help FF91 mass production as soon as possible and promote the comprehensive landing of FF's Sino-US home strategy.

Before him, FF had already poached a number of executives from companies such as Huawei and Maserati, including Gao Mengxiong, who serves as FF China CMO, and Ye Qing, who is in charge of FF's business development in China.

Not long ago, Bi Fukang also expressed certainty about the layout of the Chinese market at a FF investor presentation."We hope to sign framework agreements with local governments in China to achieve real cooperation and technical and engineering support. "

Also changing are the staff and workers in FF China. "in the past two years, some employees left because of financial difficulties, but with the recent FF's attention to China, a lot of work can be carried out, and everyone will be busy. An FF China employee, who spoke on condition of anonymity, said in an interview with the Daily Business News at the end of May.

Whether it is building a company, establishing a partnership with Geely, recruiting senior executives in China, or increasing its focus on the Chinese market, these layouts are seen in the industry as preparations for FF to gain a foothold in the Chinese market.

5. What is the current valuation？

Then let's talk about valuation. Before the IPO, FF's equity was worth $1.625 billion and existing debt was $671 million, according to the roadshow.

Through the backdoor, SPAC will provide $230 million and superimpose PIPE to raise $775 million. Upon completion of the merger, FF will be valued at $3.37 billion and equity will be expanded to 337 million shares, equivalent to the issue price of $10 per share.

It should be noted, however, that the share price of PSAC, the subject of SPAC, closed last night at close to $14, implying a combined market capitalization of $4.7 billion for FF.

According to management guidelines, FF expects to sell 2400, 113300 and 301800 vehicles in 2022, 2024 and 2025, respectively, resulting in $504 million, $10.555 billion and $21.445 billion.

Combined with the current implied market capitalization of US $4.7 billion in FF and the above performance guidance, the valuation multiple of EV/Revenue in 2024 and 2025 is 0.37x and 0.18x.Compared with NIO Inc., XPeng Inc., the ideal valuation multiple, once the future capacity construction, FF 91 mass production is smooth, the market is bound to quickly correct FF very low valuation. After all, NIO Inc. 's EV/Revenue valuation multiple is expected to be 8.1x in 2022.

Earlier, when FF executives visited Fortune to do online sharing for users, Jerry Wang, vice president of FF Capital Markets, said that FF is far ahead of all EV SPAC companies in terms of product maturity, historical investment, technology reserve and talent reserve. In addition, compared with excellent EV companies such as NIO Inc. and XPeng Inc., FF also has a very unique competitive advantage. Including global top brand positioning, product positioning, vehicle technology accumulation, Internet software AI technology innovation, global team advantage, user ecology, etc., but the market capitalization of FF is only about 1/10 of new forces, which indicates that there is great room for growth in the future, and it is also a very good potential opportunity. (for details, please refer to:What do you think of the future imagination of Faraday Future when it is about to go public?）

At the same time, he promised that after the listing, the management is very confident to achieve the FF business plan, successfully complete the delivery of FF 91, and continue to create value for the industry and shareholders.