EV firm Faraday Future drops after flagging need for funding

(Reuters) – Faraday Future Intelligent Electric Inc’s shares fell more than 7% in premarket trading on Tuesday after the electric-vehicle maker flagged the need for more cash to launch its FF91 luxury model.

The company is in talks to raise more than $200 million to fund production activities until year-end and beyond, it said in a regulatory filing on Monday.

The comments mark a reversal from Chief Executive Carsten Breitfeld’s statement just last month that Faraday Future would be able to launch its flagship model without additional funding.

EV startups that promised to disrupt the automotive industry by using a software- and technology-heavy approach are now scrambling to cut costs and secure fresh lines of cash.

The dearth of funding forced Electric Last Mile Solutions, an electric delivery van startup, to file for Chapter 7 bankruptcy protection in June.

Faraday Future said first U.S. deliveries of FF91 could also get delayed to the fourth quarter because of supply chain issues. The vehicle, seen by the company as a rival to Volkswagen Group’s Bentley and Mercedes Benz’s Maybach, was earlier expected the launch in the third quarter.

Faraday Future is one of the many EV startups that went public through blank-check mergers, a market that has slowed this year due regulatory scrutiny and the poor share performance of companies that listed via that route.

Shares of Los Angeles, California-based Faraday Future have declined about 57% so far this year.

(Reporting by Chavi Mehta and Tiyashi Datta in Bengaluru; Editing by Aditya Soni)