$Faraday Future Intelligent Electric Inc.(FFIE)$ stock price has skyrocketed to the moon this week, even as the electric vehicle maker continues to struggle under deteriorating fundamentals with worsening balance sheet and slowing demands. With no apparent news thaat would justify the rally, it appears to be another round of short-squeezing by the meme community to make quick bucks on the counter. However, I believe that the rallies will be short-lived, and the downward spiral will resume once the fundamentalists regain command. With a share price around 10 cents, time is running out for the EV maker to push its stock price above $1 by June 25, the deadline set by the Securities and Exchange Commission before its securities may be subject to delisting. Short of a convincing turnaround strategy to achieve profitability, I'm highly doubtful that Faraday Future would make it and I believe that it will just be a matter of time before the company will be delisted.
Its peer $Rivian Automotive, Inc.(RIVN)$ has also been facing downgrades by analysts as it continues to struggle with slowing demands, after its key sponsor Amazon ordered far fewer vans than previous commitment by the e-commerce giant to electrify its delivery fleet. To preserve cash as the money-losing EV maker focuses on producing and selling more affordable vehicles to boost demands, Rivian has announced delay of construction of a new $5 billion factory in Georgia, in addition to a previously announced layoff of 10% of its labor. However, more drastic measures to preserve cash and strategies to boost competitiveness amidst rising competition will be necessary.
Slowing global demands for EV have also been affecting the Chinese EV startup trio $NIO Inc.(NIO)$ , $XPeng Inc.(XPEV)$ and $Li Auto(LI)$ , while adding to their woes is a growing number of conventional car makers jumping onto the EV bandwagon, resulting in an EV supply glut. These are not helped by the prevailing price war to increase or defend market shares. As the trio struggles to find enough buyers to sustain growth, amidst intensifying competition with the latest entry of the Chinese consumer electronics giant into the EV scene, the slowing demands will continue to weigh on their stock prices.
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