EV startup Faraday Future (FFIE) began trading on the Nasdaq on Thursday, after a series of ups and downs over the past four years. FFIE stock popped more than 15% in early trading before slashing gains.
The Los Angeles-based company went public in a deal with blank check company Property Solutions Acquisition Corp. (PSAC) The business combination will result in gross proceeds of about $1 billion to Faraday Future.
Faraday will use some of the proceeds to finance the launch of its FF 91 vehicle within 12 months of the closing, the company said in a statement.
“Today is a new chapter in FF’s history, and we are thrilled to be a public company with industry leading technology, unrivaled new products, and a world class experienced team to drive the success of FF for years to come,” said Faraday Future’s CEO Carsten Breitfeld in a statement.
Faraday Future comes as Lucid Motors (LCID) is about to go public via its own SPAC merger. Lucid Motors shareholders will vote Thursday on whether to OK the merger with blank check company Churchill Capital Corp IV (CCIV). After shareholder approval, Lucid is set to begin trading as LCID on Friday.
Faraday Sees Itself As Tesla Rival
While Faraday considers itself in the same league as Tesla (TSLA), it has a long way to go to catch up with the Fremont, Calif.-based EV maker, which has a market cap of around $631 billion.
A June 23 SEC filing says the FF 91 is designed to compete with several high-end luxury cars, including Lamborghini Urus, Ferrari Purosangue, Mercedes S-Class and BMW 7-Series.
Faraday Future also plans to make a second passenger vehicle, the FF 81 series, a premium mass market EV positioned to compete against Tesla Model S and Model X, Nio ES8 and BMW 5-series.
The FF 71 series, Faraday Future’s smaller, mass market passenger vehicle, is seen as a rival to Tesla’s Model 3 and Model Y.
Faraday Future’s IPO was years in the making. The company made a big splash at CES in 2017. It planned a billion-dollar plant in Nevada. But progress came to a screeching halt, and top executives bailed. In July 2020, Faraday Future founder and CEO Jia Yueting filed for bankruptcy, and the company has yet to build a vehicle.
Shares 0.7% to 13.88 on the stock market today. FFIE stock climbed up to 17 intraday, before reversing lower.
CEO Breitfeld sees today’s IPO as a second chance for Faraday Future.
“We have been able to convince the capital market that this is a different company now, a company which can deliver a serious business plan,” Breitfeld told CNBC in an interview Thursday. “But now we have to deliver, and this is absolutely key.”
Faraday Future is expected to build 2,400 vehicles in 2022, ramping up to 38,600 in 2023 and more than 300,000 vehicles in 2025.
Meanwhile, luxury EV rival Lucid Motors expects to make 20,000 next year and 135,000 vehicles by 2025. The Churchill Capital SPAC deal values Lucid at around $24 billion. Churchill Capital stock fell 3.7%
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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