FARADAY FUTURE INTELLIGENT ELECTRIC INC. Q2 FY2023 earnings call

• CEO XF Chen provided updates on production and deliveries, noting the first FF 91 2.0 Futurist Alliance vehicle came off the line in April 2023 and first delivery occurred in August 2023, along with the start of Phase 2 deliveries and launch of Developer Co-Creation initiatives.
• Matthias Aydt discussed manufacturing progress at Hanford, vehicle technology including the FF 91 2.0's AI capabilities, Generative AI product stack enhancements, and FF aiDriving system.
• Jonathan Maroko gave a financial overview, detailed funding updates including secured convertible notes, discussed cost-cutting efforts, and outlined the goal to be operating cash flow breakeven in 2025 while addressing internal controls improvements.

Faraday Future reported an operating loss of $56.0 million for the three months ended June 30, 2023, compared to an operating loss of $137.5 million for the same period in 2022. Net loss was $124.9 million for the three months ended June 30, 2023, versus $141.7 million in the same period of 2022. Total assets on June 30, 2023, were $567.5 million, with total liabilities at $289.8 million. Net cash used in operating activities for the 6 months ended June 30, 2023, was $160.7 million, and capital expenditures were $25.9 million for the same period. Cash balance at June 30, 2023, was $19.4 million, including restricted cash of $1.5 million.

• Prudent production ramp in 2023 with focus on brand building, expecting production ramp in 2024.
• Goal to achieve operating cash flow breakeven in 2025.
• Still hesitant to provide specific delivery numbers for 2023 but expect more detailed guidance in future quarters.

• Uncertainties in financial results due to various risks and uncertainties outlined in SEC filings.
• Closing conditions for funding commitments being subject to certain conditions.
• Material weaknesses in internal controls over financial reporting addressed through restatements, with ongoing efforts to remediate these weaknesses by early 2024.

Q: Talk about volumes in the back half of 2023 and 2024.

A: Prudent production ramp with focus on brand building in 2023, expecting production ramp in 2024.

Q: Cost side guidance for cash flow breakeven.

A: Working internally on this but not yet ready to disclose publicly.

Q: Details on internal controls improvements.

A: Team has been working to improve internal controls over the past year, with restated financials for prior periods to correct misstatements, and goal to remediate material weaknesses by early 2024.

Q: Production unit deliveries in 2023.

A: Still hesitant on specific numbers, expect more detailed guidance in future quarters.

Q: Discussion on customer support service.

A: Detailed after-service offerings including FF concierge service, roadside assistance, charging solutions like FF Portable Charger and Home Charger, and public charging credit.

Q: Explanation of Co-Creation strategy.

A: Innovative brand marketing and user operating method where FF interacts with users' product expertise through projects like Futurist Product Officer and Futurist Technology Officer to co-create products embodying Ultimate AI TechLuxury