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Faraday Future CEO on going public via SPAC merger

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Yahoo Finance’s Julie Hyman, Myles Udland, and Brian Sozzi speak with Faraday Future Global CEO Carsten Breitfeld about the electric vehicle space and outlook.

Video Transcript

JULIE HYMAN: Well, the luxury electric car maker Faraday Future recently struck a deal to go public in a SPAC transaction, merging with Property Solutions Acquisition Corp. The combined company will be valued at around $3.4 billion, and it's set to close in the second quarter. The CEO of Faraday Future, Carsten Breitfeld is joining us right now to talk with us about the deal and about the plans here. Carsten, thank you for being here.

There was also the recent news that you all were talking to Geely, the Chinese car maker, about them potentially contract manufacturing your vehicle sales, and the two pieces of news together, I just wanted to talk to you about the timeline for when we will start to see Faraday Future cars. I know that you have a number of people who have orders in. When are they going to get their vehicles?

CARSTEN BREITFELD: So good morning. First of all, thank you for having me here. Yeah, we are going to launch our first product, the FF 91 here in the US out of California 12 months after the deal closes. So the first product will be shipped from the US to the rest of the world. And then you were mentioning Geely. For our market entry in China, we are setting up a joint venture. You are discussing a set up of joint venture, and Geely will be one of the partners there, which will give us, which will speed up our market entry into China.

BRIAN SOZZI: Carsten, you can you explain, Faraday Future has been around for a good bit. How-- but it has gone through some troubles here. You were recently brought in to really drive the company's vision going forward. But the founder of Jia Yueting, he still, now, he's the chief product and user officer. He ran into some financial difficulties last year. What is your relationship with him, and what's his role in the company right now?

CARSTEN BREITFELD: So Faraday Future is, I think, the only company in this field who bring two worlds together, which is the car industry, the car world, the car experience on one side. I have 25 years in this industry. I spent 20 years with BMW. I made the BMW i8 program become reality, and Jia Yueting is coming from the internet side, from the user ecosystem side. And these are the two DNAs of our company, and together this creates a strong product and strong business models.

When I came in 16 months ago, we had to do some changes in the company. We focused more on execution. We had to rework the governance. I fund I had to resolve some personal situation, some personal issues, but now this is all done and all behind us, and we are looking very much forward to launch our first product with the proceeds of this transaction we just announced.

BRIAN SOZZI: When do you, when do you plan to start making a mass market car that would rival a Tesla Model three?

CARSTEN BREITFELD: So you know, we are building a top premium brand, and the top premium brand always starts with a halo product. The first product, the FF 91 will be top luxury, the shine that will define the brand. And then maybe around 18 months later, you will see the next product. Going down one market segment and competing more in the Tesla Model S and Model X area. And then after this, we are going to have a third product, and this will then head-- address the real market, the real volume segments like Tesla Model 3 and Model Y.

MYLES UDLAND: You know, Carsten, you mentioned your experience with BMW and your involvement with the IA program over there. I'm curious from, given that experience, why right now is the moment that it seems, the electric vehicle future is kind of arriving? I mean, it seems like the acceleration point is here, and what were the challenges for the industry, whether it's traditional OEM or Tesla or Faraday getting from, kind of, concept maybe 10, 15 years ago to the point today where I think a lot of consumers are going to have access to these vehicles sooner than maybe they think?

CARSTEN BREITFELD: You know, this is funny. A couple of years ago when I was at BMW, everyone told me that Tesla will never, can never be a successful company for several reasons. If you look to the valuation today, then you know it's the valuation is more than all the premium car companies together. So things are apparently changing.

We are at a pivot point right now, and you know that some of the biggest economies in the world that is causing bans of gas cars by 2030. 2030 is nine years from now, and this is a little more than one generation of cars. So the markets are changing completely right now and at very high speed. This is an exponential growth coming up, and this puts company like us in a very good position.

Now Faraday is differentiated from other startups. We are very close to production with less than 12 months to go. We invested up to $2 billion up to date into technology and into products, so we are not a startup in that sense. And we think that we can have a very, very strong market entry very soon.

BRIAN SOZZI: Carsten, so Faraday won't have revenue this year. Now you are planning to go from no revenue this year to $21.4 billion in revenue by 2025. In 2025, what, many units are you making to drive close to $22 billion in sales, and where, where are the bulk of those sales coming from? Which market?

CARSTEN BREITFELD: So you know, I'm German, and I'm an engineer from my background, and German engineers always have a certain work ethic, and this is, underpromise and overdeliver. So the business plan we have right now is quite conservative. I personally think we can do more than we have in it. So we start with quite low volumes, and then be scaled to a couple of 100,000 units by 2025, which given the markets, how they develop right now is absolutely realistic.

If you ask about the market splits, and we are a global company. As that, we are going to launch in the US in California. They're going to deliver from California to the rest of the world in the beginning. Clearly, China is the most important EV market right now and will continue to be this. So I expect that maybe something like 50% of our volume on the midterm will go to China, and the rest will be split between the US and Europe.

JULIE HYMAN: Carsten, thanks so much for being here this morning. I know it's early on the west coast, so we appreciate it. Carsten Breitfeld is the Faraday Future CEO. Hope to catch up with you again soon. Thank you.

CARSTEN BREITFELD: Thank you for having me. Have a nice day.