Faraday Future (NASDAQ:FFIE) stock dropped after the electric vehicle (EV) company announced new versions of its FF91 car. Its price starts at $309,000.
Reservations are now open on the FF91 2.0 Futurist Alliance, and only 300 will be made. The company’s press releases insists deliveries are beginning, but only to “industry experts.” Faraday says that’s because extensive training is needed to drive the new car.
Faraday Future stock opened at about 26 cents per share, a market capitalization of $320 million. It last traded at over $1 per share in February. FFIE stock currently sits 3% down for the day at 24 cents.
A Faraday Future?
Small EV startups like Faraday Future have had a hard time lately. Scaled production from Tesla (NASDAQ:TSLA), Chinese companies, and American giants like Ford Motor (NYSE:F) and General Motors (NYSE:GM) has many investors questioning the small firms’ future.
Several of these tiny EV firms have been threatened with delisting as their prices can’t get over $1. Some responded with reverse stock splits.
Even startups with ample cash, like Rivian (NASDAQ:RIVN) and Lucid Motors (NASDAQ:LCID), are unable to gain traction as investors see a shakeout in the sector as imminent.
Faraday itself is a hybrid company. It was initially pitched as American but now focuses on its Chinese founder, Jia Yueting.
The company’s low stock price has brought more skeptical press coverage. Electrek said the FF91 launch had “many buzzwords.” Skepticism may be warranted. The car is five years late, and there are now many cars on the road that beat its original specifications. Faraday says it has 401 paid reservations for the new car.
Faraday hoped its “1-on-1 bespoke private AI and special tuning” would draw the media’s attention. Instead, most reporters and analysts focused on the price, which is six times higher than many competing electrics.
FFIE Stock: What Happens Next?
If I owned Faraday stock today, even at 24 cents, I’d sell it. There are too many buzzwords and too many caveats on actual deliveries of this car for my comfort.
On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
