After a volatile month with some major swings, Faraday Future Intelligent Electric (NASDAQ:FFIE) finally has a positive catalyst on the horizon. The electric vehicle (EV) producer has announced that it will restart deliveries on June 12 after pausing them four months ago.
More specifically, the company plans on delivering the first edition of its second-generation FF 91 to a retail investor, according to EV. FFIE stock is rising today on the news after weeks of coming down from the short squeeze momentum shares saw in May.
What’s Happening With FFIE Stock?
For weeks, FFIE stock has been taking investors on a wild ride. When the Roaring Kitty rally boosted many meme stocks last month, Faraday Future enjoyed more momentum than popular favorites such as GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC). But like all flash-in-the-pan rallies, this one proved short-lived. Short interest in Faraday has since fallen substantially.
The company hasn’t given investors much cause for optimism, as FFIE stock has continued to erase its gains. But yesterday, after close of markets, Faraday issued the following post on X:
This news was enough to boost shares slightly today, although FFIE stock ultimately closed in the red by 0.08% on Tuesday. Still, one delivery doesn’t mean that Faraday has a long list of customers waiting to snap up vehicles. As InvestorPlace contributor Viktor Zarev reports:
“Taking a closer look at FFIE’s initial business model starts to make you wonder who they were planning on selling to in the first place. Ultra-high luxury electric cars don’t have a large enough market to be profitable. Even more worrying, FFIE continues to bleed money with no end in sight as it uses buzzwords like ‘generative AI’ to keep hopeful shareholders hooked.”
Faraday’s peers know this to be true. Fellow high-end luxury EV producer Lucid (NASDAQ:LCID) has struggled for months, failing to come close to rising above the $5 mark. But the bleeding money that Zarev outlines with Faraday should worry investors more. Unless this bleeding stops, Faraday will go the way of troubled automaker Fisker (OTCMKTS: FSRN), just as some have predicted it will.
The Road Ahead
At this point, investors should be careful not to get too excited about Faraday’s delivery news. Yes, it’s a good thing that the company is starting to deliver vehicles again. But FFIE stock still looks highly unstable and faces far too many obstacles to look like a safe play on the EV market.
Shares will likely rise tomorrow on retail speculation. But unless Faraday can demonstrate that there is mainstream demand for its high-end EVs, any growth will likely be quickly erased.
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On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
