Faraday Future stock: FFIE is vulnerable despite 2025 profit hopes

Faraday Future (NASDAQ: FFIE) stock price has made a slow recovery in the past few weeks after the company unveiled FF 91 that will cost over $300k. The company also jumped in the artificial intelligence bandwagon by launching its Futuristic Alliance model. The stock has jumped by more than 130% from the lowest level this year.

Concerns about Faraday Future

Faraday Future has made a lot of progress as it seeks to become a leading electric vehicle manufacturer. In March, the company started the first phase of manufacturing its vehicles in California. In its earnings call, the CEO said that the firm hopes to deliver the vehicles to Futurist Product Officers (FPOs) in the second phase,

Then in the final phase, all users will be able to buy and take possession of the vehicles. The three stages are intended to ensure that the company delivers the highest quality vehicles to consumers. It is unclear when the company will start these deliveries and ramp up production.

The biggest concern for Faraday is that its balance sheet is not all that good. The company ended the quarter with about $31 million in cash and short-term investments. In the first quarter, the firm secured $135 million of gross funding. And in May, the company secured an additional $100 million in funding through unsecured convertible notes.

Still, building and selling vehicles is a highly expensive affair, as we have seen with other companies. Just recently, Lucid Motors diluted shareholders by raising $3 billion, as we wrote here. Its cash challenge are despite the fact that the company is already selling cars. 

Therefore, I believe that Faraday Future is being a bit aggressive by predicting that it will become profitable by 2025. For one, companies like Rivian and Lucid are expected to break even in 2028 and 2027, respectively. 

Faraday Future stock price analysis

FFIE stock price has bounced back recently, likely because of its investments in AI and last week’s reveal. This rally has also coincided with Tesla’s recovery. The shares jumped above the key resistance point at $0.2422, the lowest point in 2022. It has jumped above the 50-day moving average while its relative volume has jumped. 

In all, I suspect that the stock will soon resume the bearish trend and retest the support at $0.2422. A break below this support will see the shares retest the all-time low of $0.15. In the long term, I can’t rule out a situation where the shares move below its record low.