What changed in this filing

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Item 1. Business

2023-03-09 compared with 2022-05-13 · 408 added, 204 removed, 334 unchanged (65% of the section changed)

Unless the context indicates otherwise, references in this Annual Report on Form 10-K to “FF” refer to Faraday Future Intelligent Electric Inc.

(f/k/a Property Solutions Acquisition Corp.), a holding company incorporated in the State of Delaware, and not to its subsidiaries, and references herein to the “Company,” “we,” “us,” “our” and similar terms refer to FF and its consolidated subsidiaries.

We refer to our primary operating subsidiary in the U.S., Faraday&Future Inc., as “FF U.S.” We refer to all our subsidiaries organized in China and in Hong Kong collectively as the “PRC Subsidiaries,” a complete list of which is set forth in Exhibit 21.1 to this Annual Report on Form 10-K.

As of the date of this Annual Report on Form 10-K, our only operating subsidiaries in China and in Hong Kong are FF Automotive (China) Co.

Unless the context indicates otherwise, references in this Annual Report on Form 10-K to “FFIE” refer to Faraday Future Intelligent Electric Inc.

(f/k/a Property Solutions Acquisition Corp.), a holding company incorporated in the State of Delaware, and not to its subsidiaries, and references herein to the “Company,” “FF,” “we,” “us,” “our” and similar terms refer to FFIE and its consolidated subsidiaries.

We refer to our primary operating subsidiary in the U.S., Faraday&Future Inc., as “FF U.S.” We refer to all our subsidiaries organized in China (including Hong Kong) collectively as the “PRC Subsidiaries,” a complete list of which is set forth in Exhibit 21.1 to this Annual Report on Form 10-K forms a part.

As of February 27, 2023, our only operating subsidiaries in mainland China and in Hong Kong are FF Automotive (China) Co.

Ltd., Ruiyu Automotive (Beijing) Co., Ltd.

and Shanghai Faran Automotive Technology Co., Ltd., each of which was organized in the PRC.

The discussion of FF’s business and the electric vehicle industry below is qualified by, and should be read in conjunction with, the discussion of the risks related to FF’s business and industry detailed in Item 1A in this Annual Report on Form 10-K.

Company Overview

FF is a California-based global shared intelligent mobility ecosystem company with a vision to disrupt the automotive industry.

With headquarters in Los Angeles, California, FF designs and engineers next-generation intelligent, connected, electric vehicles.

With headquarters in Los Angeles, California, the Company designs and engineers next-generation intelligent, connected, electric vehicles.

FF intends to start manufacturing vehicles at its production facility in Hanford, California, with additional future production capacity needs addressed through a contract manufacturing partner in South Korea.

FF is also exploring other potential contract manufacturing options in addition to the contract manufacturer in South Korea.

FF has additional engineering, sales, and operational capabilities in China and plans to develop its manufacturing capability in China through a joint venture or other arrangements.

Since its founding, FF has created major innovations in technology and products, and a user centered business model.

The Company has additional engineering, sales, and operational capabilities in China and is exploring opportunities for potential manufacturing capabilities in China through a joint venture or other arrangement.

Since its founding, the Company has created major innovations in technology and products, and a user centered business model.

We believe these innovations will enable FF to set new standards in luxury and performance that will enhance quality of life and redefine the future of intelligent mobility.

FF’s principal executive office is located at 18455 S.

Figueroa Street, Gardena, CA 90248 (telephone number (310) 415-4807).

The Company's website is located at www.ff.com and its investor relations website is located at investors.ff.com.

The information contained on or connected to FF’s websites is not incorporated by reference into this Annual Report on Form 10-K and should not be considered part of this or any other report filed with the U.S.

Securities and Exchange Commission (“SEC”).

FF’s filings with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, are accessible without charge on FF’s investor relations website, as soon as reasonably practicable, after we electronically file such material with, or furnish such material to, the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act.

Such filings are also available on the SEC's website at www.sec.gov.

FF’s technology innovations include its proprietary Variable Platform Architecture (“VPA”), propulsion system, and Internet, Autonomous Driving, and Intelligence (“I.A.I.”) system.

FFIE is a holding company incorporated in the State of Delaware.

As a holding company with no material operations of its own, FFIE conducts its operations through its operating subsidiaries.

We currently have a majority of our operations in the U.S.

conducted through our U.S.-domiciled operating subsidiaries.

We also operate our business in the People’s Republic of China and plan to have significant operations in the future in both Mainland China and Hong Kong (together, “PRC” or “China”) through our subsidiaries organized in the PRC (collectively, the “PRC Subsidiaries”).

Investors in FFIE’s Class A Common Stock (the “Class A Common Stock,” and with FFIE’s Class B Common Stock, the “Common Stock”) are investors solely of FFIE, a Delaware holding company.

There are various risks associated with our current operating presence in China and the potential expansion of our operations in China (including Hong Kong), which is subject to political and economic influence from China.

Recently, the Chinese government initiated a series of regulatory actions and made statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies that seek to conduct offshore securities offering or to be listed overseas, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.

Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation-making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated if any, and the potential impact such modified or new laws and regulations will have on our business operations, our ability to accept foreign investments and to maintain FFIE’s listing on a U.S.

The Chinese government may intervene or influence the operations of our PRC Subsidiaries, or at any time exert more control over offerings conducted overseas and foreign investment in China-based issuers in accordance with PRC laws and regulations, which could result in a material change in our operations and/or a material reduction in the value of our Class A Common Stock and warrants.

Additionally, the governmental and regulatory interference could significantly limit or completely hinder our and our investors’ ability to offer or continue to offer our shares of Class A Common Stock to investors and cause the value of such securities to significantly decline or be worthless.

For a detailed description of risks related to our PRC operations, see “ Risk Factors – Risks Related to FF’s Operations in China.

FF’s technology innovations include its proprietary Variable Platform Architecture (“VPA”), propulsion system, and Internet, Autonomous Driving, and Intelligence (“I.A.I.”) systems.

The VPA is a modular skateboard-like platform which can be sized to accommodate various motor and powertrain configurations, enabling fast and capital efficient product development for both the passenger and commercial vehicle segments.

FF’s propulsion system includes industry-leading inverter design, and a propulsion system that provides a leading competitive edge in electric drivetrain performance.

FF’s propulsion system includes an industry-leading inverter design, and a propulsion system that provides a competitive edge in electric drivetrain performance.

FF’s advanced I.A.I.

technology offers high-performance computing, high speed internet connectivity, Over-the-air (“OTA”) updates, an open ecosystem for third party application integration, and a Level 3 autonomous driving-ready system, in addition to several other proprietary innovations that enable the Company to build a highly personalized user experience.

FF has recently upgraded the FF 91 Futurist vehicle from PT Gen 1.0 to PT Gen 2.0.

This generational upgrade consists of 26 significant upgrades to systems and core components of both the EV area (the vehicle) and the I.A.I area (the advanced core of intelligence, autonomous driving and internet).

The 13 key upgrades to the EV area include improvements to the powertrain, battery, charging, chassis, and interior, and the 13 key upgrades to I.A.I.

include upgrades in computing, sensing, user interaction, and communication, as well as upgrades to the newest technology.

Along with other vehicle performance improvements, FF’s technology is designed to deliver superior acceleration of 2.27 seconds from 0 to 60 mph and safety.

Since inception, FF has developed a differentiated portfolio of valuable intellectual property.

As of March 31, 2022, the Company has been granted more than 650 patents (with approximately a third issued in the U.S., and slightly less than two-thirds issued in China, and the remaining issued in other jurisdictions).

As of February 27, 2023, the Company has been granted approximately 660 patents (with approximately a third issued in the U.S., and slightly less than two-thirds issued in China, and the remaining issued in other jurisdictions).

These patents are issued to various FFIE entities, including Faraday Future, Faraday & Future, FF Automotive (China) Co., Ltd., Leka Automotive Intelligent Technology (Beijing) Co., Ltd., and LeEco Eco-Car (Zhejiang) Co., Ltd.

Key patents include FF’s inverter assembly, integrated drive and motor assemblies, methods and apparatus for generating current commands for an interior permanent magnet (“IPM”) motor, and keyless vehicle entry system.

These key patents will expire in 2035 and 2036.

FF’s B2C (business-to-consumer) passenger vehicle launch pipeline over the next five years includes the FF 91 series, the FF 81 series, and the FF 71 series.

FF’s passenger vehicle portfolio is designed to address different passenger vehicle segments.

In addition to passenger vehicles, leveraging its VPA, FF plans to launch a Smart Last Mile Delivery (“SLMD”) vehicle to address the high growth last mile delivery opportunity.

FF’s presence in the last mile delivery segment will enable the Company to leverage its technology and expand its total addressable market and avenues for growth.

FF’s B2C (business-to-consumer) passenger vehicle pipeline over the next five years includes the FF 91 series, the FF 81 series, and the FF 71 series, each designed to target different passenger vehicle segments.

In addition to passenger vehicles, and leveraging its VPA and other proprietary technology, FF plans to produce a Smart Last Mile Delivery (“SLMD”) vehicle to address the high growth last mile delivery market.

Each of the three passenger vehicle series is planned in two different configurations (the FF 91 will also come in a limited edition model).

At the top end, the “Futurist” configurations will drive FF’s core brand values (design, superior driving experience, and personalized user experience) to the fullest.

At the top end, the “Futurist” configurations will drive FF’s core brand values (design, superior driving experience, and personalized user experience enabled through FF’s unique I.A.I technologies) to the fullest.

Offering multiple configurations allows FF to participate in a wide price range within each vehicle series.

FF intends to commercially launch the FF 91 series in the third quarter of 2022.

Please refer to “Risk Factors — FF’s vehicles are in development and its first vehicle may not be available for sale in the third quarter of 2022, if at all” for a discussion on risks and uncertainties related to the expected launch.

Toward that goal, FF has completed most of the vehicle development milestones, and recently announced the completion of its first production-intent build at the Hanford manufacturing plant.

The FF 91 series is designed to compete with Maybach, Bentley Bentayga, Lamborghini Urus, Ferrari Purosangue, Mercedes S-Class, Porsche Taycan, BMW 7-Series, etc.

Based on certain management assumptions, including the timely receipt of $ 38.4 million to $ 58.4 million of additional funding, which commitments have been secured on February 3, 2023, where the Company entered into an Amendment No.

6 to Securities Purchase Agreement (the “Sixth Amendment”) with FF Simplicity as administrative and collateral agent and Senyun, FF Top, FF Simplicity, FF Prosperity, Acuitas and other purchasers, and approval by stockholders of the proposal to increase FFIE’s authorized shares of Class A Common Stock from 815,000,000 to 1,690,000,000 , increasing the total authorized shares from 900,000,000 to 1,775,000,000 , which approval was obtained during the special meeting of stockholders held on February 28, 2023, timely completion of key equipment installation and commissioning work at the ieFactory California in Hanford, California, suppliers meeting their commitments on program deliverables including parts, the implementation and effectiveness of certain expense reduction and payment delay measures, and timely and successful testing and certification, FF expects start of production of the FF 91 Futurist at the end of March 2023, coming off the line in early April 2023, and deliveries to users anticipated to begin before the end of April 2023.

Please refer to “Risk Factors – Risks Related to FF’s Business and Industry – FF’s vehicles are in development and the delivery of FF’s first vehicle has experienced, and may continue to experience, significant delays” for a discussion on risks and uncertainties related to the expected production and delivery.

Toward that goal, FF has completed most of its vehicle development milestones, and recently announced Milestone #6, completion of key equipment installation work at the ieFactory California in Hanford, California.

The FF 91 series is designed to compete with Maybach, Bentley Bentayga, Lamborghini Urus, Ferrari Purosangue, Mercedes S-Class, Rolls Royce Spectre, Porsche Taycan, BMW 7-Series, etc.

In addition to the FF 91 series, FF has planned the following passenger vehicles:

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All FF passenger vehicles will share common brand “DNA” of:

● Intelligence, Internet and connectivity;

● modern design:

styling and interior materials;

● superior driving experience:

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space, comfort and internet experience

The flagship FF 91 series will define the FF brand DNA.

The flagship FF 91 series with its recent product and technology upgrade to PT Gen 2.0 will define the FF brand DNA.

This DNA will carry over to FF 81 and FF 71 series vehicles at lower price points.

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Robust Hybrid Manufacturing Strategy

To implement a capital light business model, FF has adopted a hybrid global manufacturing strategy consisting of its refurbished manufacturing facility in Hanford, California and a collaboration with Myoung Shin, a leading contract manufacturing partner in South Korea.

FF is also exploring other potential contract manufacturing options in addition to the contract manufacturer agreement in South Korea.

The Company is also exploring the possibility of manufacturing capacity in China through a joint venture or other arrangements.

The Company is also exploring the possibility of manufacturing capacity in China through a joint venture or other arrangement.

As of the date hereof:

• FF leased a 1.1 million square foot manufacturing facility in Hanford, California with an expected production capacity of approximately 10,000 vehicles per year;

• FF entered into a definitive contract manufacturing and supply agreement with Myoung Shin Co., Ltd.

● FFIE leased a 1.1 million square foot manufacturing facility in Hanford, California with an expected production capacity of approximately 10,000 vehicles per year;

● FFIE entered into a definitive contract manufacturing and supply agreement with Myoung Shin Co., Ltd.

(“Myoung Shin”), a South Korea-based automotive manufacturer and parts supplier, to manufacture the Company’s second vehicle, the FF 81.

The agreement has an initial term of nine years from the start of production of the FF 81, which is scheduled for 2024.

The agreement has an initial term of nine years from the start of production of the FF 81.

Pursuant to the agreement, Myoung Shin shall maintain sufficient manufacturing capabilities and capacity to supply FF 81 vehicles to FF in accordance with the Company’s forecasts and purchase orders.

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FF management anticipates making its first passenger vehicles available in the U.S., followed shortly thereafter by a rollout in China.

Expansion of sales to Europe is expected to begin in 2023.

Expansion of sales to Europe may begin as early as 2024, and additional markets may be added thereafter.

FF plans to utilize a direct sales model integrating online and offline sales channels to drive sales and user (including customers, drivers, passengers of FF vehicles) operations to continuously create value.

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Projected product performance with industry-leading propulsion technology

FF’s propulsion system includes an industry-leading inverter design and propulsion system.

FF’s propulsion system includes an industry-leading inverter design and proprietary drive propulsion system.

FF’s proprietary FF Echelon Inverter has the technological advantage of driving a large amount of current in a small space using proprietary parallel Insulated Gate Bipolar Transistors (“IGBTs”), achieving low inverter losses and high efficiency.

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The electric motor drive units are fully integrated with the inverter, transmission and control unit to create industry-leading volume and design efficiency.

Propelled by an integrated FF designed powertrain, FF’s vehicles can achieve leading horsepower, efficiency, and acceleration performance.

Propelled by an integrated FF designed powertrain, FF’s vehicles can achieve leading horsepower, efficiency, and acceleration performance as recently attested by the U.S.

Environmental Protection Agency (“EPA”) and California’s Air Resources Board (“CARB”) by confirming a range of 381 miles on a single charge and internally measured acceleration of 2.27 seconds from 0 to 60 mph for the FF 91.

Internet, Autonomous Driving, and Intelligence (“I.A.I”) Technology

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technology offers high-performance computing, high speed internet connectivity, OTA updates, an open ecosystem for third party application integration, and a Level 3 autonomous driving-ready system, in addition to several other proprietary innovations that enable the Company to build an advanced highly personalized user experience.

The FF 91 series will feature a high-performance dual systems-on-a-chip (“SoC”) computing platform for in-vehicle infotainment, a NVIDIA based autonomous driving system, and a high-speed connectivity system capable of up to three simultaneous 4G/LTE carrier connections.

The FF 91 series will feature a high-performance dual systems-on-a-chip (“SoC”) computing platform for in-vehicle infotainment, a NVIDIA based autonomous driving system, and a high-speed connectivity system that will be capable of up to three simultaneous 5G connections.

Together, these systems will deliver a highly intelligent voice-first user experience, and seamless cloud connectivity and a vehicle that is Level 3 highway autonomous driving ready.

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All FF vehicles use FF’s proprietary FFID unique identifier to deliver personalized content, apps and experiences.

FFID provides a unique Faraday Future user profile that ensures a consistent experience across the FF Ecosystem, as the user goes from one seat to another or even from one vehicle to another.

FFID provides a unique FF user profile that ensures a consistent experience across the FF Ecosystem, as the user goes from one seat to another or even from one vehicle to another.

Strong intellectual property portfolio

FF has significant capabilities in the areas of vehicle engineering, vehicle design and development, as well as software, internet, and AI.

The Company has additionally developed a number of proprietary processes, systems and technologies across these areas.

The Company has also developed a number of proprietary processes, systems and technologies across these areas.

FF’s research and development efforts have resulted in a strong intellectual property portfolio across battery, powertrain, software, user interface design and user experience design (“UI/UX”), and advanced driver-assistance systems, among other areas.

FF’s proprietary inverter design provides high current and is integrated into the electric drive unit, creating a high power-to-weight ratio.

The patented keyless entry technology recognizes the user from a distance, opens (not only unlocks) doors and customizes the user’s seating area using facial-recognition-prompted download of FFID.

Patented autonomous driving technology can be used to find empty space in a parking lot and autonomously park using cameras, radars, LIDARs (Light Detection and Ranging), ultrasound and an inertial measurement unit (“IMU”).

The patented keyless entry technology recognizes the user from a distance, opens (rather than simply unlocking) doors and customizes the user’s seating area using facial-recognition-prompted download of FFID data.

Patented autonomous driving technology will allow users to find empty space in a parking lot and autonomously park using cameras, radars, LIDARs (Light Detection and Ranging), ultrasound and an inertial measurement unit (“IMU”) (available after production and delivery via a software upgrade).

FF believes its strong intellectual property portfolio will allow continued differentiation from its competitors and shorten time to market for future products.

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FF is led by a visionary management team with a unique combination of automotive, communication, and internet experience.

FF’s Executive Chairperson, Sue Swenson, has a long experience in public company governance, particularly in technology, media and communications companies.

FF’s Global CEO, Dr.

Carsten Breitfeld, is a seasoned automotive industry veteran with over 20 years of leadership experience at BMW.

Breitfeld was previously in charge of several innovative vehicle projects at BMW, including the i8 Vehicle Program which gave birth to the i8 luxury plug-in hybrid model.

Breitfeld also served as Founder, Chairman and Chief Executive Officer of BYTON, a Chinese electric vehicle startup with operations in multiple countries.

FF’s Founder and Chief Product and User Ecosystem Officer, YT Jia, focuses on product and mobility ecosystem;

FF’s Global CEO, Mr.

Xuefeng Chen, is an automotive veteran with international and extensive operational experience with luxury automotive brands, Mr.

Xuefeng Chen has spent nearly 20 years in the automotive industry, having worked for Changan Ford, Changan Mazda, Ford Asia Pacific Design Center and Chery Jaguar Land Rover prior to joining FF.

FF’s founder and Chief Product and User Ecosystem Officer, Mr.

Yueting Jia, focuses on product and mobility ecosystem;

internet and AI;

and advanced R&D technology.

YT Jia founded Leshi Information Technology Co., Ltd., a video streaming website in 2004.

Jia founded Leshi Information Technology Co., Ltd., a video streaming website in 2004.

He also founded Le Holdings Co.

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FF’s other management team members have significant product, industry and leadership experience in areas such as vehicle engineering, battery, powertrain, software, internet, AI, and consumer electronics.

Speed to market with the ability to launch commercial production in the third quarter of 2022

FF has achieved several commercial milestones as it works to bring the FF 91 to the market.

When FF launches the FF 91, the Company expects to be the first entrant in the ultra-luxury EV segment.

FF has recently completed the first of its planned production-intent vehicles at the Hanford manufacturing plant, and will produce many more in the coming months for testing, validation, and marketing purposes.

As of the date hereof, only a few standard off-the-shelf components remain to be sourced.

Speed to market

FF has achieved several commercial milestones as it works to bring the FF 91 Futurist to the market.

When FF delivers the FF 91 Futurist, the Company expects to be the first entrant in the ultra-luxury EV segment, particularly in light of the recently announced product and technology upgrade to PT Gen 2.0.

Electric Vehicle Industry Overview and Market Opportunity

The electric vehicle industry is poised for explosive growth.

Based on the Electric Vehicle Outlook 2021 report, a long-term forecast published in May 2021 by Bloomberg New Energy Finance (“BNEF Report”), passenger electric vehicle sales in the U.S., Europe, and China would grow to a total of approximately 14.0 million vehicles in 2025, from 3.1 million vehicles in 2020, and then continue to grow rapidly.

Based on the Electric Vehicle Outlook 2022 report, a long-term forecast published by Bloomberg New Energy Finance (“BNEF Report”), which forecasts that passenger electric vehicle sales in the U.S., Europe, China and other regions in the world could grow to a total of approximately 20.6 million vehicles in 2025, from 6.6 million vehicles in 2021, and then continue to grow rapidly.

Driven by China’s new energy vehicle (“NEV”) credit and European CO2 regulations as well as city policies restricting new internal combustion engine (“ICE”) vehicle sales, electric vehicle sales in China and Europe are estimated to exceed 65% of all passenger electric vehicle sales by 2030, according to the BNEF Report.

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Environmental concerns have resulted in tightening emission regulations globally, and there is a broad consensus that further emission reductions will require increased electrification in the automotive industry.

The cost of regulatory compliance for ICE power-trains is rising sharply due to the natural limitations of traditional ICE technologies.

The cost of regulatory compliance for ICE powertrains is rising sharply due to the natural limitations of traditional ICE technologies.

In response, global original equipment manufacturers (“OEMs”) are aggressively shifting their strategies toward electric vehicles.

At the same time, consumers are more concerned about the impact of goods they purchase, both on their personal health and the environment.

As consumer awareness increases, zero emission transportation has become a popular and widely advocated urban lifestyle which has accelerated further development in the electric vehicle market.

As consumer awareness increases, zero emission transportation has become a popular and widely advocated urban lifestyle which has accelerated further development of the electric vehicle market.

Consumer pressure can also be seen in the commercial

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(formerly known as Smart King Ltd.), in the Cayman Islands in November 2017, as the parent company of Smart Technology Holdings Ltd.

To enable effective control over FF’s Chinese operating entity and its subsidiaries without direct equity ownership, in November 2017, the WFOE entered into a series of contractual arrangements (“VIE contractual arrangements”) with LeSee Beijing and LeSee Zhile Technology Co., Ltd., which previously held 100% of LeSee

To enable effective control over FF’s Chinese operating entity and its subsidiaries

without direct equity ownership, in November 2017, the WFOE entered into a series of contractual arrangements (“VIE contractual arrangements”) with LeSee Beijing and LeSee Zhile Technology Co., Ltd., which previously held 100% of LeSee Beijing.

The VIE contractual arrangement enabled FF to exercise effective control over LeSee Beijing and its subsidiaries, to receive substantially all of the economic benefits of such entities, and to have an exclusive option to purchase all or part of the equity interests in LeSee Beijing.

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LeSee Beijing is currently owned 99% by the WFOE.

The organizational chart below shows FF’s operating subsidiaries 2 as of the date hereof:

The organizational chart below shows FFIE’s operating subsidiaries* as of the date hereof:

* Excludes subsidiaries with immaterial operations.

FF Hong Kong Holding Limited is a holding company subsidiary organized in Hong Kong.

As of the date of hereof, LeSEE Automotive (Beijing) Co.

As of the date hereof, LeSEE Automotive (Beijing) Co.

Ltd., a subsidiary organized in China, has immaterial operations.

PRC Subsidiaries

FFIE is a holding company incorporated in the State of Delaware.

“FF U.S.”, FF’s primary U.S.

operating subsidiary, was incorporated and founded in the State of California in May 2014.

We refer to all our subsidiaries organized in China (including Hong Kong) collectively as the “PRC Subsidiaries.” A complete list of our subsidiaries is set forth in Exhibit 21.1 to this Annual Report on Form 10-K.

As of February 27, 2023, our only operating subsidiaries in China (including Hong Kong) are FF Automotive (China) Co.

Ltd., Ruiyu Automotive (Beijing) Co., Ltd.

and Shanghai Faran Automotive Technology Co., Ltd., each of which was organized in the PRC.

How Cash is Transferred Through Our Corporate Organization

The PRC has currency and capital transfer regulations that require us to comply with certain requirements for the movement of capital in and out of the PRC.

FFIE is able to transfer cash (U.S.

Dollars) to the PRC Subsidiaries through capital contributions (increasing FFIE’s capital investment in the PRC Subsidiaries).

FFIE may receive cash or assets declared as dividends from the PRC Subsidiaries.

The PRC Subsidiaries can transfer funds to each other when necessary, by way of intercompany loans in the following manners:

• FF Hong Kong Holding Limited, as the holding company of all the other PRC Subsidiaries, can transfer cash to any PRC Subsidiary through capital contribution.

We note Hong Kong’s banking system is outside PRC mainland’s banking system.

As a result, when FF Hong Kong Holding Limited transfers cash to a PRC Subsidiary, it is required to follow the SAFE (as defined below) process and regulation.

• FF Hong Kong Holding Limited, as the holding company of all the other PRC Subsidiaries, may receive cash or assets declared as dividends from the other PRC Subsidiaries.

• Among PRC Subsidiaries other than FF Hong Kong Holding Limited, one PRC Subsidiary can provide funds through intercompany loan to another PRC Subsidiary and each such PRC Subsidiary is required to follow the rules of China Banking Regulatory Commission and other relevant Chinese authorities.

Additionally, one PRC Subsidiary can transfer cash to its subsidiary through capital contribution, and any PRC Subsidiary may receive cash or assets declared as dividends from any of its subsidiaries.

During 2019, FF Inc., a U.S.-based subsidiary incorporated in California, issued a loan to FF Hong Kong Holding Limited, a holding company subsidiary established in Hong Kong, in the aggregate amount of $1.2 million, which was the only transaction that involved the transfer of cash or assets throughout our corporate structure during 2019.

During 2020, LeSee Automotive (Beijing) Co.

Ltd., a PRC Subsidiary, assigned to Legacy FF its obligation to pay certain notes issued by a third party in the aggregate principal and accrued interest amount of $26.5 million.

Also during 2020, Smart Technology Holdings Ltd., a subsidiary incorporated in the Cayman Islands, transferred to FF Hong Kong Holding Limited $1.7 million in cash, in the aggregate, by way of capital contributions to fund the PRC Subsidiaries’ operations.

During 2021, Smart Technology Holdings Ltd.

transferred to FF Hong Kong Holding Limited $32.1 million, in the aggregate, by way of capital contributions to fund the operations of the PRC Subsidiaries, including $10.0 million proceeds from the sale of PIPE Shares.

In August 2021, Legacy FF extended a loan of $50.0 million to FF Automotive (Zhuhai) Co.

Ltd., a PRC Subsidiary, for the purpose of acquiring a technology license agreement with a third party.

We transferred cash or assets of $9.1 million from Smart Technology Holdings Ltd.

to FF Hong Kong Holding Limited during the fourth quarter of 2021.

In 2022 and 2023 to date, FF U.S.

extended loans in an aggregated amount of $8.0 million and $3.0 million, respectively, to FF Hong Kong Holding Limited to fund the operations of the PRC Subsidiaries.

We will continue to assess the PRC Subsidiaries’ requirements to fund their operations and intend to effect additional contributions as appropriate.

As of February 27, 2023, our only operating subsidiaries in China (including Hong Kong) are FF Automotive (China) Co.

Ltd., Ruiyu Automotive (Beijing) Co., Ltd.

and Shanghai Faran Automotive Technology Co., Ltd., each of which was organized in the PRC.

The PRC Subsidiaries have not transferred cash or other assets to FFIE, including by way of dividends.

FFIE does not currently plan or anticipate transferring cash or other assets from our operations in China to any non-Chinese entity.

Capital contributions to PRC companies are mainly governed by the Company Law and Foreign Investment Law of the People’s Republic of China, and the dividends and distributions from the PRC Subsidiaries are subject to regulations and restrictions of the PRC on dividends and payment to parties outside of the PRC.

Applicable PRC law permits payment of dividends to FFIE by our PRC Subsidiaries only out of their net income, if any, determined in accordance with PRC accounting standards and regulations.

Our operating PRC Subsidiaries are required to set aside a portion of their net income, if any, each year to fund general reserves for appropriations until such reserves have reached 50% of the relevant entity’s registered capital.

These reserves are not distributable as cash dividends.

A PRC company is not permitted to distribute any profits until any losses from prior fiscal years have been offset.

Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year.

In addition, registered share capital and capital reserve accounts are also restricted from withdrawal in the PRC, up to the amount of net assets held in each operating subsidiary.

PRC Restrictions on Foreign Exchange and Transfer of Cash

Under PRC laws, if certain procedural requirements are satisfied, the payment of current account items, including profit distributions and trade and service related foreign exchange transactions, can be made in foreign currencies between entities, across borders, and to U.S.

investors without prior approval from State Administration of Foreign Exchange (the “SAFE”) or its local branches.

However, where Chinese Yuan (“CNY”) is to be converted into foreign currency and remitted out of China to pay capital expenses, such as the repayment of loans denominated in foreign currencies, approval from or registration with SAFE or its authorized banks is required.

The PRC government may take measures at its discretion from time to time to restrict access to foreign currencies for current account or capital account transactions.

If the foreign exchange control system prevents our PRC Subsidiaries from obtaining sufficient foreign currencies to satisfy their foreign currency demands, our PRC Subsidiaries may not be able to pay dividends in foreign currencies to FFIE.

Further, we cannot assure you that new regulations or policies will not be promulgated in the future that would have the effect of further restricting the remittance of CNY into or out of the PRC.

We cannot assure you, in light of the restrictions in place, or any amendment thereof, that the PRC Subsidiaries will be able to fund their future activities which are conducted in foreign currencies, including the payment of dividends.

Furthermore, under PRC laws, dividends may be paid only out of distributable profits.

Distributable profits are the net profit as determined under PRC GAAP, less any recovery of accumulated losses and appropriations to statutory and other reserves required to be made.

Our PRC Subsidiaries shall appropriate 10% of the net profits as reported in their statutory financial statements (after offsetting any prior year’s losses) to the statutory surplus reserves until the reserves have reached 50% of their registered capital.

As a result, our PRC Subsidiaries may not have sufficient, or any, distributable profits to pay dividends to us.

See “ Risk Factors–Risks Related to FF’s Operations in China–FFIE is a holding company and, in the future, may rely on dividends and other distributions on equity paid by the PRC Subsidiaries to fund any cash and financing requirements that FFIE may have, and the restrictions on PRC Subsidiaries’ ability to pay dividends or make other payments to FFIE could restrict FFIE’s ability to satisfy its liquidity requirements and have a material adverse effect on FFIE’s ability to conduct its business ” for a more detailed discussion of the relevant risks relating to restrictions on foreign exchange and transfer of cash.

Requirements Under PRC Laws and Regulations

Under current PRC laws and regulations, each of our PRC Subsidiaries is required to obtain a business license to operate in the PRC.

Our PRC Subsidiaries have all received the requisite business license to operate, and no application for business license had been denied.

As our operations in the PRC expand, our PRC Subsidiaries will be required to obtain approvals, licenses, permits and registrations from PRC regulatory authorities, such as the State Administration for Market Regulation, the National Development and Reform Commission, Ministry of Commerce (“MOFCOM”), and the Ministry of Industry and Information Technology (“MIIT”), which oversee different aspects of the electric vehicle business.

As of February 27, 2023, no application by our PRC Subsidiaries for any such approvals, licenses, permits and registrations that are currently applicable to them had been denied, but there can be no assurance that the PRC Subsidiaries will be able to maintain their existing licenses or obtain new ones.

See “Risk Factors–Risks Related to FF’s Operations in China–FF may be adversely affected by the complexity, uncertainties and changes in PRC regulations on internet-related business, automotive businesses and other business carried out by FF’s PRC Subsidiaries.” for a more detailed discussion of the risks relevant to the regulations relating to the operations of the PRC Subsidiaries.

We do not believe any permission is required from any Chinese authorities (including the China Securities Regulatory Commission (the “CSRC”) and the Cyberspace Administration of China (the “CAC”)) in connection with our previous offerings or listing.

We do not and immediately prior to the filing of this Annual Report on Form 10-K, will not possess over one million of PRC-based individual’s personal information.

After consulting our PRC counsel, Fangda Partners, we believe we are currently not subject to the requirement under the Cybersecurity Review Measures that a network platform operator which possesses more than one million users’ personal information must apply for a cybersecurity review with CAC before listing abroad.

In addition, as of February 27, 2023, after consulting our PRC counsel, we are not aware of any other laws or regulations currently effective in the PRC which explicitly require us to obtain any permission from the CSRC or other Chinese authorities for our previous offering or listing, nor had we received any inquiry, notice, or warning from the CSRC or any other Chinese authorities in such respects.

The PRC authorities have promulgated new or proposed laws and regulations recently to further regulate securities offerings that are conducted overseas and/or foreign investment in China-based issuers.

According to these new laws and regulations and the draft laws and regulations if enacted in their current forms, in connection with our future securities offering activities, we may be required to fulfill filing, reporting procedures with the CSRC, and may be required to go through cybersecurity review by the PRC authorities.

However, there are uncertainties with respect to whether we will be able to fully comply with requirements to obtain such permissions and approvals from, or complete such reporting or filing procedures with PRC authorities.

For more detailed information, see “Risk Factors– Risks Related to FF’s Operations in China–The approval of, or filing or other administrative procedures with, the CSRC or other PRC governmental authorities may be required in connection with certain of our financing activities, and, if required, we cannot predict if we will be able to obtain such approval or complete such filing or other administrative procedures” and “Risk Factors– Risks Related to FF’s Operations in China–We face challenges from the evolving regulatory environment regarding cybersecurity, information security, privacy and data protection.

Many of these laws and regulations are subject to change and uncertain interpretation, and any actual or alleged failure to comply with related laws and regulations regarding cybersecurity, information security, data privacy and protection could materially and adversely affect our business and results of operations ” for a more detailed discussion of the relevant risks relating to the applicable of PRC laws and Regulations.

Risks Related to FF’s Operations in China

FF operates in China, and plans to have significant operations in the future in China (including Hong Kong) through its PRC Subsidiaries, and faces various legal and operational risks associated with doing business in China, which could result in a material change in the operations of our PRC Subsidiaries, cause the value of FFIE’s securities to significantly decline or become worthless, and significantly limit or completely hinder FF’s ability to accept foreign investments, and FFIE’s and our investors’ ability to offer or continue to offer our shares of Class A Common Stock to investors.

FF also faces similar risks related to its expansion plans in Hong Kong, which is subject to political and economic influence from China.

These risks, each discussed in detail in the section “ Risk Factors–Risks Related to FF’s Operations in China ” include:

• Changes in the political and economic policies of the PRC government may materially and adversely affect FF.

• Uncertainties with respect to the Chinese legal system, regulations and enforcement policies could have a material adverse effect on FF.

• Foreign currency fluctuations could reduce the value of our Common Stock and dividends paid on our Common Stock.

• Changes in the laws and regulations of China or noncompliance with them could adversely affect FF.

• Restrictions on PRC Subsidiaries’ ability to pay dividends or make other payments to FFIE in the future could restrict FFIE’s ability to satisfy its liquidity requirements and have a material adverse effect on FFIE’s business.

• FFIE may be classified as a PRC “resident enterprise,” which would likely result in unfavorable tax consequences to FFIE and its non-PRC enterprise stockholders.

• FFIE and its stockholders face uncertainty with respect to indirect transfers of equity interests in China resident enterprises through transfer of non-Chinese-holding companies.

• PRC regulation of loans to and direct investments in PRC entities may delay or prevent us from making loans or additional capital contributions to our PRC Subsidiaries.

• The PRC government can take regulatory actions and make statements to regulate business operations in China with little advance notice, so our assertions and beliefs of the risks imposed by the Chinese legal and regulatory system cannot be certain, and actions related to oversight and control over offerings that are conducted overseas and/or foreign investment in issuers with substantial operations in China could significantly limit or completely hinder our and our investors’ ability to offer or continue to offer shares of Class A Common Stock $0.0001 par value, and warrants to purchase shares of Class A Common Stock to investors and cause the value of our securities to significantly decline or be worthless.

• The approval of, or filing or other administrative procedures with, the CSRC or other PRC governmental authorities may be required in connection with certain of our financing activities, and, if required, we cannot predict if we will be able to obtain such approval or complete such filing or other administrative procedures.

• Certain PRC rules and regulations establish complex procedures for some acquisitions by foreign investors, which could make it more difficult for us to grow in China.

• FF may be adversely affected by the complexity, uncertainties and changes in PRC regulations on internet-related business, automotive businesses and other business carried out by FF’s PRC Subsidiaries.

• We face challenges from the evolving regulatory environment regarding cybersecurity, information security, privacy and data protection.

• In the event that the independent auditor operating in China that FF engages for its operations in China is not permitted to be subject to inspection by the Public Company Accounting Oversight Board (“PCAOB”), then investors may be deprived of the benefits of such inspection.

regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.

• There may be difficulties in effecting service of legal process, conducting investigations, collecting evidence, enforcing foreign judgments or bringing actions in China against us and our management.

Significant milestones in FF’s historical development and commercialization of FF’s electric vehicles include the following:

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FF also began designing the FF 81 project in January 2018.

• In September 2020, FF entered into a non-binding memorandum of understanding with a large city in China where FF plans to build its China headquarters and research and development center in China.

Pursuant to the non-binding proposal, FF intends to form a joint venture in the city and expects that the city will provide certain support to the joint venture.

● In January 2021, Legacy FF, FF Automotive (Zhuhai) Co., Ltd.

and FF Hong Kong Holding Limited.

entered into a cooperation framework agreement with Zhejiang Geely Holding Group Co., Ltd.

and FF Hong Kong Holding Limited entered into a cooperation framework agreement with Zhejiang Geely Holding Group Co., Ltd.

pursuant to which Geely Holding agreed to explore the possibility of joint investment in the technology licensing, contract manufacturing and joint venture with FF and the city, as well as to pursue the possibility of further business cooperation with the joint venture.

The joint venture remains subject to agreement by the parties on a joint venture agreement and the closing of the Private Placement.

FF believes the strategic partnership among the city, Geely Holding and FF, if successfully entered into, will benefit the implementation of FF’s dual-home market strategy in China.

The joint venture and contract manufacturing projects with Geely Holding are on hold.

● In January 2021, FF announced that it entered into a definitive agreement for a business combination with PSAC, with the combined company to be listed on The Nasdaq Stock Market under the ticker symbol “FFIE”.

● In July 2021, FF announced that it completed its previously announced merger with PSAC, which resulted in the combined company being renamed Faraday Future Intelligent Electric.

The common stock and warrants of the Company began trading on the NASDAQ Stock Market on July 22, 2021 as “FFIE” and “FFIEW”, respectively.

The Class A Common Stock and Public Warrants of the Company began trading on The Nasdaq Stock Market on July 22, 2021 as “FFIE” and “FFIEW,” respectively.

● In September 2021, FF completed the installation of pilot equipment in the pre-production build area of its Hanford, California facility.

● In October 2021, FF received its final Certificate of Occupancy (“CO”) for a dedicated area for pre-production manufacturing at the facility in Hanford, California.

The CO allowed FF to begin crucial construction activities, including the building of additional pre-production vehicles at the facility.

● In December 2021, FF started foundation construction for all remaining production areas in the Hanford facility, including body, propulsion, warehouse and vehicle assembly.

Interior foundation work in the production area is now well advanced, major mechanical system, including electrical and plumbing, are being installed now.

• In February 2022, FF announced that Myoung Shin Co., Ltd., an automotive manufacturer headquartered in South Korea, has been contracted to manufacture FF’s second vehicle, the FF 81, with SOP scheduled for 2024.

Interior foundation work in the production area is complete, major mechanical systems, including electrical and plumbing, have been installed and equipment installation is underway.

● In February 2022, FF announced that Myoung Shin had been contracted to manufacture FF’s second vehicle, the FF 81, with SOP scheduled for as early as 2024.

● In February 2022, FF unveiled the first production-intent FF 91 EV manufactured at its Hanford, California plant.

● In April 2022, FF signed a sourcing agreement for battery packs for the FF 91 with a leading global battery supplier and innovator in lithium-ion technology.

The FF 91 battery pack will feature state-of-the-art technology designed to deliver superior power, energy, and charging speeds.

● In May 2022, FF marked Production Milestone #5 at its Hanford, California manufacturing facility, with the start of installation of all mechanical, electrical and plumbing systems to support equipment installation.

● In May 2022, FF announced its Flagship brand experience center, to be located in Beverly Hills, California where visitors can experience the brand’s advanced technology, distinctive luxury, and futuristic design.

● In August 2022, FF announced its sponsorship and attendance at the 2022 Pebble Beach Concours d’Elegance taking place from August 18-21, 2022.

FF’s flagship FF 91 EV was available for demo rides and made a special appearance on the Concept Lawn on August 21, 2022.

● In September 2022, FF announced the FF 91 Futurist, the Ultimate Intelligent TechLuxury EV, was officially certified to have a robust rating of 381 miles of EV range from the U.S.

Environmental Protection Agency.

● In November, 2022, FF announced the CARB has certified the FF 91 Futurist as a zero-emissions vehicle (ZEV).

The ZEV program is part of CARB’s Advanced Clean Cars package of coordinated standards that control smog-causing pollutants and greenhouse gas emissions of passenger vehicles in California.

● In November 2022, FF announced Production Milestone #6, completion of key equipment installation work at its Hanford, California manufacturing Facility.

● On December 15, 2022, FF hosted a Global Investor Business Update meeting, announcing plans to start production of FF 91 Futurist in March 2023 (subject to various management assumptions disclosed elsewhere in this Annual Report on Form 10-K), financing progress and completion of product upgrades.

On February 20, 2023, FF announced that March 30, 2023 as its target start of production date, assuming timely receipt of funds from investors.

● On January 17, 2023, FF announced that, in the third quarter of fiscal year 2022, it had reached a non-binding Cooperation Framework Agreement with the government of the City of Huanggang in Hubei Province, China (“Huanggang”), for promoting FF’s U.S.-China dual-home market strategy.

According to the Cooperation Framework Agreement, FF intends to relocate its FF China headquarters to Huanggang, while maintaining its global headquarters in Los Angeles, California.

Partnership Program

In order to ensure the sustainability of the Company’s mission, vision and values, certain current and former executives of FF established a partnership program (the “Partnership Program”) through FF Global Partners LLC (“FF Global”) in July 2019.

FF Global controls Pacific Technology Holding LLC, which indirectly holds approximately 36.2% of the voting power of FF’s share capital on a fully-diluted basis as of the date hereof.

The members and managers of FF Global are treated as “partners” or “preparatory partners” from FF Global’s internal governance perspective.

FF Global is managed by its board of managers (“FF Global Board”), which currently consists of eight managers — YT Jia, Matthias Aydt, Jiawei Wang, Tin Mok, Prashant Gulati, Chaoying Deng, Philip Bethell and Dr.

Carsten Breitfeld.

A majority of the managers of FF Global (excluding Dr.

Carsten Breitfeld, who does not yet have voting rights because he has not met the tenure eligibility requirement, and once he satisfies the tenure requirement in September 2022, subject to election by the partners of FF Global, he might become a voting manager) present at a meeting of the FF Global Board where there is a quorum is required to approve any material actions of FF Global (“Reserved Matters”), including actions relating to the voting and disposition of shares of FFIE held by FF Top Holding LLC (f/k/a FF Top Holding Ltd.) (“FF Top”) and indirectly owned by FF Global.

In the event of a tie at any meeting of the FF Global Board, the manager designated by Chaoying Deng as the managing partner has a casting vote.

Except for the Reserved Matters, management of FF Global has been delegated to the managing partner for efficient management.

Based on our investigation, we believe that YT Jia has significant influence over and may control the outcome of any actions taken by the FF Global Board through a series of familial and personal relationships that he has with the other managers on the FF Global Board.

The committee has adopted policies to address the nomination and election of partners and managers of FF Global.

These policies specify certain minimum requirements to be eligible for such positions, including minimum tenure as an employee of FF, business-related performance and behavior-related performance in connection with corporate cultural values during the tenure as an employee of FF, minimum tenure as a partner or preparatory partner, and payment of a portion of the capital contributions to FF Global.

FF Global elects those members of FF management and FF employees who share the same mission and vision, demonstrate partnership spirit, and have made significant contributions to become partners or preparatory partners of FF Global, and issues corresponding units to them.

The units may be redeemed by FF Global if the FF Global Board determines in its sole discretion that the holder has acted in a manner that is detrimental to FF Global, FF or any of their affiliates, breached the operating agreement of FF Global or any other agreement between the holder and FF Global or ceased to provide services to FF Global, FF or their affiliates with or without cause.

The managers, except for the managing partner, are nominated by the partners of FF Global from the existing partners that satisfy certain qualifications and elected by all partners by plurality voting according to the policy and procedures adopted by the committee.

Each partner has one vote in the process and the preparatory partners have no voting rights but each can attend the meetings of the partners.

In addition, the creditors’ trust from YT Jia’s Chapter 11 bankruptcy has a substantial preferred economic interest in Pacific Technology Holding LLC and has observatory rights on the FF Global Board.

The Partnership Program is a measure to attract and retain talent of FF and FF Global.

The program aims to embody the vision of a large group of management team and employees and foster the spirit of partnership.

The peer nature of the partnership enables the Company’s executives and some key employees to work together without bureaucracy.

FF Global has 21 partners (one of them is not a member) and 6 preparatory partners as of the date hereof.

The Partnership Program is dynamic and enables admission of new partners and preparatory partners.

The number of partners and preparatory partners may also change due to the removal or departure of partners and preparatory partners.

Acting through FF Global Partners LLC (“FF Global”), a major shareholder of the Company, in July 2019 certain current and former executives of the Company established an arrangement which they refer to as the “Partnership Program.” FF Global beneficially owns approximately 15.4% of the voting power of the Company’s fully diluted Common Stock.

As described below, the Partnership Program provides financial benefits to certain Company directors, management and employees, which they are required to report to the Company pursuant to the Company’s Investment Reporting Policy.

The Partnership Program is administered by FF Global and is not under the Company’s supervision.

Purpose of Partnership Program

The purpose of the Partnership Program is to help the Company and FF Global succeed, including by helping key Company employees remain aligned with the Company’s mission, interests and economic success, by awarding units representing membership interests in FF Global to such individuals.

We have been advised by FF Global that the secretary of FF Global provides recommendations to the FF Global Board of Managers regarding proposed awards based on, among other things:

● the individual’s position in the Company and/or FF Global,

● the importance of the individual’s role in the Company and/or FF Global,

● the individual’s historical contributions to the Company and/or FF Global,

● the importance of the individual to the achievement of the Company’s and FF Global’s strategic objectives,

● the individual’s awards under the Company’s employee stock option plan, and

● the individual’s existing holdings of FF Global units.

The awards under the Partnership Program have in the past been granted exclusively to current or former employees of the Company or its affiliates, FF Global may in the future determine to grant awards to individuals who are not affiliated with the Company.

Pursuant to our Investment Reporting Policy, members of our management and other employees are required to report information relating to their investments, including their interests in FF Global.

However, since the Company’s board of directors (the “Board”) does not have oversight over the Partnership Program, the Company is not able to assess whether awards made by FF Global under the Partnership Program incentivize management and employee behavior and activities that the Company intends to incentivize, or indeed, whether the Partnership Program effectively works against efforts by the Company to manage its workforce.

For example, as part of the special committee of independent directors established by the Board to investigate allegations of inaccurate Company disclosures (“Special Committee”), as further discussed below, it was determined that a Company employee who is also a beneficiary under the Partnership Program deliberately interfered with the Special Committee’s investigation.

Although the Company disciplined this employee, the effectiveness of the Company’s disciplinary efforts may have been counteracted by awards this employee has received or expects to receive under the Partnership Program.

Terms of Awards

FF Global units awarded under the Partnership Program are purchased by the recipient from FF Global.

The recipient pays the purchase price for their common units in 10 annual installments.

The units entitle the recipient to receive distributions from FF Global when and if declared by the FF Global Board of Managers on a pro rata basis based on their paid-in capital (after their contributions are all returned).

FF Global units are subject to redemption in certain cases, including upon termination of employment with FF Global or the Company or any of their affiliates, at a redemption price that generally is no lower than the unreturned capital contributions.

Scope of Partnership Program

FF Global has informed us that to date a total of 34 individuals have received awards under the Partnership Program, that 19 individuals continue to hold such awards, and that all recipients of such awards are current or former directors or employees of the Company or its affiliates.

Some of these individuals are or were members of the FF Global Board of Managers.

In particular, we understand that (amounts below in single dollars):

Carsten Breitfeld, FF’s former Global CEO and a former director of FFIE, was a non-voting member of the FF Global Board of Managers until May 2022, and previously held FF Global units.

In connection with Dr.

Breitfeld’s voluntary resignation from FF Global in May 2022 to avoid any potential conflicts of interest, Dr.

Breitfeld forfeited his 13,000,000 FF Global units.

On November 26, 2022, the Board voted to remove Dr.

Breitfeld as Global CEO and, on December 26, 2022, Dr.

Breitfeld tendered his resignation from the Board, which was effective immediately.

● Matthias Aydt, our Senior Vice President, Product Execution and a director of FFIE, was a member of the FF Global Board of Managers until June 2022, and previously held FF Global units.

According to information provided by Mr.

Ruokun Jia, a nephew of Mr.

Jia who was formerly an Assistant Treasurer of FFIE but who was terminated for conduct during the Special Committee’s investigation, Dream Sunrise is owned by an associate of him.

On June 26, 2019, to finance his acquisition of the FF Global units and his then concurrent loan to FF Global in the original principal amount of $4,257,791.97, Mr.

Aydt issued a note in the original principal amount of $4,624,391.97 to Dream Sunrise LLC (“Dream Sunrise”).

On August 2, 2021, FF Global paid down its loan obligations to Mr.

Aydt by $2,071,721.72, by paying down Mr.

Aydt’s loan obligations to Dream Sunrise by the same amount, evidenced by that certain Repayment Agreement, dated as of March 7, 2022, by and among Dream Sunrise, FF Global and Mr.

Aydt, an amended and restated note dated as of March 7, 2022 from FF Global to Mr.

Aydt in the principal amount of $2,186,070.25 (the “Aydt-FF Global Note”), replacing the prior note issued by FF Global to Mr.

Aydt on June 26, 2019 in its entirety, and an amended and restated note dated as of March 7, 2022 from Mr.

Aydt to Dream Sunrise in the principal amount of $2,552,670.25 (the “Dream Sunrise-Aydt Note”), replacing the prior note issued by Mr.

Aydt to Dream Sunrise on June 26, 2019 in its entirety.

In order to avoid any potential conflicts of interest that his ownership of FF Global units presents toward his role as a director of FFIE, in June 2022, Mr.

Aydt requested that FF Global redeem in full all of his FF Global units.

On July 8, 2022, FF Global, Dream Sunrise and Mr.

Aydt entered into an Redemption Agreement, pursuant to which in exchange for FF Global’s redemption in full of all of Mr.

Aydt’s FF Global units and in satisfaction of all of FF Global’s then outstanding loan obligations to Mr.

Aydt under the Aydt-FF Global Note, other than $87,742.95, which represents interests accrued on $366,600 of the principal amount under the Dream Sunrise-Aydt Note, FF Global assumed all of Mr.

Aydt’s then outstanding loan obligations under the Dream Sunrise-Aydt Note.

As of February 27, 2023, the $87,742.95 that Mr.

Aydt owes to Dream Sunrise remains outstanding.

● Qing Ye, former director of FFIE and former Vice President of Business Development and FF PAR, previously held FF Global units.

On June 26, 2019, to finance his acquisition of the FF Global units and his then concurrent loan to FF Global in the original principal amount of $1,993,009.01, Mr.

Ye issued a note in the original principal amount of $2,164,609.01 to Dream Sunrise.

On June 13, 2022, FF Global paid down its loan obligations to Mr.

Ye by $969,742.08, by paying down Mr.

Ye’s loan obligations to Dream Sunrise by the same amount, evidenced by an amended and restated note dated as of June 13, 2022 from FF Global to Mr.

Ye in the principal amount of $1,023,266.93 (the “Ye-FF Global Note”), replacing the prior note issued by FF Global to Mr.

Ye on June 26, 2019 in its entirety, and an amended and restated note dated as of June 13, 2022 from Mr.

Ye to Dream Sunrise in the principal amount of $1,194,866.93 (the “Dream Sunrise-Ye Note”), replacing the prior note issued by Mr.

Ye to Dream Sunrise on June 26, 2019 in its entirety.

In order to avoid any potential conflicts of interest that his ownership of FF Global units presents towards his role as a director of FFIE, in June 2022, Mr.

Ye requested that FF Global redeem in full all of his FF Global units.

On June 24, 2022, FF Global, Dream Sunrise and Mr.

Ye entered into an Redemption Agreement, pursuant to which in exchange for FF Global’s redemption in full of all of Mr.

Ye’s FF Global units and in satisfaction of all of FF Global’s then outstanding loan obligations to Mr.

Ye under the Ye-FF Global Note, other than $41,071.17, which represents interests accrued on $171,600 of the principal amount under the Dream Sunrise-Ye Note, FF Global assumed all of Mr.

Ye’s then outstanding loan obligations under the Dream Sunrise-Ye Note.

As of February 27, 2023, the $41,071.17 that Mr.

Ye owes to Dream Sunrise remains outstanding.

On January 25, 2023, Mr.

Ye resigned as a member of the Board.

Ye remains a consultant of the Company as an independent contractor until November 18, 2023, at which time both parties will mutually reassess the relationship.

● Robert Kruse, FF’s former Senior Vice President, Product Execution, previously held 1,500,000 FF Global units.

On November 29, 2022, Mr.

Kruse resigned from the Company.

● Chui Tin Mok, our Global Executive Vice President and the Global Head of User Ecosystem and a director of FFIE (effective January 25, 2023), currently holds 780,000 FF Global units.

On June 26, 2019, to finance his acquisition of the FF Global units and his then concurrent loan to FF Global in the original principal amount of $2,264,782.96, Mr.

Mok issued a note in the original principal amount of $2,459,782.96 to Dream Sunrise.

In May 2022, Mr.

Mok returned 3,120,000 of his FF Global units to FF Global pursuant to amendments to the governance documents of FF Global.

On March 7, 2022, FF Global paid down its loan obligations to Mr.

Mok by $1,101,979.63, by paying down Mr.

Mok’s loan obligations to Dream Sunrise by the same amount, evidenced by an amended and restated note dated as of March 7, 2022 from FF Global to Mr.

Mok in the principal amount of $1,162,803.33, replacing the prior note issued by FF Global to Mr.

Mok on June 26, 2019 in its entirety, and an amended and restated note dated as of March 7, 2022 from Mr.

Mok to Dream Sunrise in the principal amount of $1,357,803.33, replacing the prior note issued by Mr.

Mok to Dream Sunrise on June 26, 2019 in its entirety.

● Hong Rao, our Vice President of I.A.I.

(Internet, Autonomous Driving, Intelligence), currently holds 100,000 FF Global units.

● In addition to the loans described above with respect to Mr.

Ye, a number of our other current and former employees have used funds loaned by Dream Sunrise to fund the purchase of their FF Global units and their concurrent loans to FF Global, including Chui Tin Mok and Jerry Wang.

Moreover, based on information provided by Mr.

Xuefeng Chen and FF Global, pursuant to an offer letter between them dated January 20, 2021, Mr.

Xuefeng Chen will become an FF Global partner if he subscribes and pays for 5,000,000 FF Global units and 2,500,000 performance-based units at a subscription price currently set at $0.50 per unit (which could be subject to adjustment based on FFIE’s stock price).

FF Technology

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The platform directly houses the critical components of an electric vehicle, including all-wheel steering, suspension system, brakes, wheels, electric propulsion system, electronic control units and high voltage battery, among others.

Each of these component systems has been engineered in-house or in collaboration with suppliers and has been integrated into the FF vehicles with a view to strive for optimizing performance, efficient packaging, and functional integration.

Each of these component systems has been engineered in-house or in collaboration with suppliers and has been integrated into the FF vehicle design with a view to strive for optimizing performance, efficient packaging, and functional integration.

As an integrated structure, the skateboard-like platform can be shortened or lengthened to allow various wheelbases and battery pack sizes along with other options to fit into the platform.

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The platform enables scalable vehicle design and improves manufacturing flexibility as well as capital efficiency and allows continuous improvement across product generations.

It is also designed to reduce development time for future models leveraging the platform, as most of research and development and a significant portion of the crash structure is integrated into the platform and enables 5 star and equivalent safety ratings.

The modular design of the VPA is adaptable to support a wide range of FF vehicles for both consumer and commercial vehicle markets.

Propulsion Technology

FF has designed an integrated set of powertrain systems ideally suited for FF’s modular VPA.

FF believes its proprietary and patented designed electric powertrain provides a leading competitive edge in horsepower, efficiency, and acceleration performance.

FF has designed an integrated set of powertrain systems ideally suited for FF’s modular VPA, which has been recently upgraded to PT Gen 2.0 to further enhance performance.

FF believes its proprietary and patented designed electric powertrain provides a competitive edge in horsepower, efficiency, and acceleration performance.

FF Echelon Inverter

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Integrated Electric Motor Drive Units

FF has internally designed its electric motor drive units (including gearbox).

FF designed its electric motor drive units (including gearbox).

The electric drive units are fully integrated with the inverter, transmission, and control unit to create a compact and efficient design.

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Depending on the power requirements of each model, the motors can be utilized individually or in two or three motor configurations.

The combination of high-power and high-torque is expected to provide users with powerful driving force.

The FF 91 Futurist, equipped with three integrated electric drive units (each is designed to deliver up to 350 horsepower), is expected to deliver 1,050 horsepower and 12,510 Newton meters (“Nm”) of torque.

FF believes its electric drive unit design is ahead of most of its competitors in terms of performance because of its proprietary, advanced packaging, stator-rotor design, and unique inverter layout.

FF believes its electric drive unit design is ahead of many of its competitors in terms of performance because of its proprietary, advanced packaging, stator-rotor design, and unique inverter layout.

Internet, Autonomous Driving, and Intelligence (“I.A.I.”)

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FF’s vehicles are designed with software OTA capabilities, which allow software and applications in the vehicle to be updated and upgraded wirelessly to deliver continuous enhancements.

The vehicle will be connected to FF’s information cloud at all times.

The vehicle is designed to be connected to FF’s information cloud at all times.

When there is a firmware or software update available, FF’s cloud will push an update message to the vehicle to notify the driver to schedule an update.

Upgrades will be wirelessly downloaded to the vehicle, installed, and launched,

including updates for firmware, operating systems, middleware, and applications.

Upgrades will be wirelessly downloaded to the vehicle, installed, and

enabled, including updates for firmware, operating systems, middleware, and applications.

FF’s patented Future OS operating system allows multiple users to login through FF 91, preparing user’s preferences per their cloud based FFID profiles.

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FF plans to devote resources to autonomous driving research and development and plans to work with partners to deliver full autonomous-driving capabilities in highway and urban driving, as well as parking, across its vehicle lines in the future.

FF’s Artificial Intelligence system can actively learn preferences, habits, entertainment, and navigation routines of a user, and associates them with the user’s unique FFID (Faraday Future proprietary user ID).

FFID provides a unique Faraday Future user profile that ensures a consistent experience across the FF Ecosystem, as the user goes from one seat to another or even from one vehicle to another.

FFID provides a unique FF user profile that ensures a consistent experience across the FF Ecosystem, as the user goes from one seat to another or even from one vehicle to another.

The seamless design and interface of the in-vehicle infotainment system planned in FF vehicles will offer multiple human-machine interface (“HMI”) options and facilitate a personalized user experience for each seat in the vehicle.

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Electrical/ Electronic (“E/E”) Architecture

FF plans to design the first generation of FF vehicle series (FF 91 and FF 81) to adopt a domain-centralized E/E architecture, which enables architecture flexibility and maximizes performance efficiency while meaningfully reducing the overall system complexity and weight.

The domain-centralized E/E architecture will consolidate the domain functions across five core high-performance domain control units (“DCU”) that manage, compute, and process controls for propulsion, chassis, self-driving, body, and IoV (Internet over Vehicle – connected infotainment system).

FF has designed the first generation of FF vehicle series (FF 91) with a domain-centralized E/E architecture, which enables architecture flexibility and maximizes performance efficiency while meaningfully reducing the overall system complexity and weight.

The E/E architecture of FF’s variable platform architecture is designed with the capacity to support the power and communication requirements necessary for seamless integration with advanced autonomous systems as they evolve.

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FF has developed an extensive portfolio of proprietary technologies that will be embedded and integrated in FF vehicles.

FF’s B2C passenger vehicle launch pipeline over the next five years includes FF 91 series, FF 81 series and FF 71 series.

In addition to passenger vehicles, leveraging its VPA, FF plans to launch a Smart Last Mile Delivery (“SLMD”) vehicle to address the high growth last mile delivery opportunity.

FF’s B2C passenger vehicle pipeline over the next five years includes FF 91 series, FF 81 series and FF 71 series.

In addition to

passenger vehicles, leveraging its VPA, FF plans to produce a Smart Last Mile Delivery (“SLMD”) vehicle to address the high growth last mile delivery opportunity.

Passenger Vehicles

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All passenger vehicles will share common brand “DNA” of:

● Intelligence, Internet and connectivity;

● modern design:

styling and interior materials;

● superior driving experience:

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With a wheelbase of 3,200 mm (126 inches), FF 91, FF’s flagship vehicle, is designed to be a high-performance luxury electric vehicle in the E-segment/Executive/Full-Size or F-segment/Full-size luxury vehicle segment.

FF has built numerous prototypes and pre-production assets for validation and testing, and recently completed its first production-intent build at its Hanford, California manufacturing plant.

FF aims to launch FF 91 in the third quarter of 2022.

6 to Securities Purchase Agreement (the “Sixth Amendment”) with FF Simplicity as administrative and collateral agent and Senyun, FF Top, FF Simplicity, FF Prosperity, Acuitas and other purchasers, and approval by stockholders of the proposal to increase FFIE’s authorized shares of Class A Common Stock from 815,000,000 to 1,690,000,000 , increasing the total authorized shares from 900,000,000 to 1,775,000,000 , which approval was obtained during the special meeting of stockholders held on February 28, 2023, timely completion of key equipment installation and commissioning work at the ieFactory California in Hanford, California, suppliers meeting their commitments on program deliverables including parts, the implementation and effectiveness of certain expense reduction and payment delay measures, and timely and successful testing and certification, FF expects start of production of the FF 91 Futurist at the end of March 2023, coming off the line in early April, and deliveries to users anticipated to begin before the end of April 2023.

Please refer to “ Risk Factors – Risks Related to FF’s Business and Industry – FF’s vehicles are in development and the delivery of FF’s first vehicle has experienced, and may continue to experience, significant delays ” for a discussion on risks and uncertainties related to the expected production and delivery.

FF believes that FF 91 represents a “new species” of electric mobility that combines high performance, precise handling, the comfort of a luxury passenger vehicle, and an intelligent, connected user interface which provides a unique mobility experience to both driver and passenger.

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FF 91 features a multi-motor configuration and an all-wheel drive system.

With three electric motors (one in the front and two in the rear), the top configuration (FF 91 Futurist) is designed to produce 1,050 horsepower and 12,510 Nm of torque to all four wheels.

This enables FF 91 Futurist to have torque vectoring in the rear for enhanced vehicle dynamics and stability.

With three electric motors (one in the front and two in the rear), the top configuration (the FF 91 Futurist) is designed to produce 1,050 horsepower and 12,510 Nm of torque to all four wheels.

This enables the FF 91 Futurist to have torque vectoring in the rear for enhanced vehicle dynamics and stability.

Its all-wheel drive system offers greater traction control as well as precise power distribution.

This technology delivers superior acceleration and safety.

This technology is designed to deliver superior acceleration of 2.27 seconds from 0 to 60 mph and safety.

The variable platform architecture for FF 91 series houses floor-mounted batteries, as well as FF’s proprietary inverter, the FF Echelon Inverter, and integrated electric motor drive units.

All three elements, battery, inverter and drive units, support an achieved 381 miles EPA range.

FF 91 is expected to charge at up to a 200kW rate.

FF plans to provide charging solutions in FF’s self-owned stores and FF Partner-owned stores and showrooms.

The FF 91 aims to deliver a first-class user experience that emphasizes personalization and comfort for all users of the vehicle, including the driver and passengers.

FF plans to provide charging solutions available through FF’s self-owned stores and FF Partner-owned stores and showrooms.

The FF 91 aims to deliver a top-quality experience that emphasizes personalization and comfort for all users of the vehicle, including both driver and passengers.

In terms of driver comfort, there are six driver-specific screens including an ultra-large heads-up display and slim instrument cluster.

The center information display supports on-screen gesturing with swipe of fingers.

The center information display supports on-screen gesturing with the

swipe of a user’s fingers.

The reconfigurable 3D touch steering wheel can allow further user configurability.

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There are over 100 inches of high-resolution viewing area across 11 displays embedded in the vehicle.

These include industry’s first 17-inch front passenger screen and industry-leading 27-inch rear passenger display, allowing passengers to stream their favorite movies, TV shows and live sports while the FF 91 is in motion without driver distraction.

These include industry’s first 17-inch front passenger screen and a large 27-inch rear passenger display, allowing passengers to stream their favorite movies, TV shows and live sports while the FF 91 is in motion without driver distraction.

The voice-first foundation enables multiple natural commands at once, facilitating the areas of comfort (including air conditioning, seat positions, and doors), productivity (including text, email, and phone calls), entertainment (including media playlists and content search) and destination reaching (including refined search and navigation).

The connectivity is powered by “Super Mobile AP”, which consists of up to three modems to realize aggregated high internet speed and great coverage by multi-carriers for high-throughput and continuous coverage.

The connectivity is powered by “Super Mobile AP”, which consists of up to three 5G modems to realize aggregated high internet speed and great coverage by multiple carriers for high-throughput and continuous coverage.

The Artificial Intelligence system and use of FFID (automatically loaded through facial recognition in each seat) carry the personalized user experience from seat-to-seat and vehicle-to-vehicle.

The front and rear passengers will have individual sound zones, which allow passengers in the front and passengers in the rear to listen to their separate audio content with minimal sound interference.

The front and rear passengers will have (post production and delivery) individual sound zones, which allow passengers in the front and passengers in the rear to listen to their separate audio content with minimal sound interference.

The luxury interior design of the FF 91 Futurist also features “zero gravity” seats in the rear row (with industry leading 48.9 inches rear leg room and 60-degree recline).

The vehicle also offers a spa mode with personalized seat position, ventilation, massage settings, light animations, and ambient sound.

For autonomous driving, FF 91 will have up to 12 cameras, up to 5 radar sensors, LIDAR, and 12 ultrasound sensors with full 360-degree sensor coverage to allow the FF 91 to steer autonomously once the autonomous driving software solution is validated and released.

FF anticipates that its autonomous driving system will deliver several highway autonomy and parking features, and through continuous learning over time, will enable Autonomous Valet Parking (“AVP”) — where the vehicle can

autonomously navigate a parking lot, find a parking space and park itself.

The vehicle will also offer a spa mode with personalized seat position, ventilation, massage settings, light animations, and ambient sound.

For autonomous driving, FF 91 is expected to have an array of cameras, sensors and LIDARs.

Once an autonomous driving software solution is validated and released, FF anticipates that its autonomous driving system will deliver several highway autonomy and parking features, and through continuous learning over time, will enable Autonomous Valet Parking (“AVP”) - where the vehicle can autonomously navigate a parking lot, find a parking space and park itself.

Eventually, the adaptive learning could allow the driver to use an application to park and summon the vehicle after the driver has exited the vehicle.

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FF 91 Futurist currently has a target starting price of $180,000.

The FF 81 series is FF’s planned second vehicle model and is aimed at the premium mass market in the D-segment or E-segment (with a wheelbase of 3,000 mm).

The FF 81 will be designed and built on FF’s proprietary VPA enabling up to 60% carry-over of common parts from FF 91.

FF 91 Futurist currently has an estimated starting price of $180,000 (specific pricing to be refined and finalized closer to time of delivery of each vehicle).

The FF 81 series is FF’s planned second vehicle model and is aimed at the premium mass market in the D-segment or E-segment.

The FF 81 will be designed and built on FF’s proprietary VPA enabling more than 60% carry-over of common parts from the FF 91.

In addition, parts developed for the FF 81 can be carried back to FF 91 series.

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The FF 81 aims to deliver a premium user experience that emphasizes personalization.

The FF 81 is planned with high-performance computing and next generation connectivity with a voice-first user interface and open ecosystem for third-party applications.

The FF 81 is planned with high-performance computing and next generation connectivity with a voice-first user interface and open ecosystem for third-party

applications.

It also has integrated, autonomous driving features and the pertinent hardware capability, including cameras, radars, ultrasound sensors, and optional LIDAR(s).

FF 81 Futurist is expected to compete with vehicles such as the Tesla Models S/X, BMW X5 and Range Rover Sport, etc.

FF’s third planned passenger vehicle, the FF 71 series, is expected to be a connected electric vehicle with a more compact size aiming at the mass market in the C-segment or D-segment (with a wheelbase of 2,850 mm).

FF 81 Futurist is expected to compete with vehicles such as the Tesla Models S/X, BMW X5 and Range Rover Sport and the like.

FF’s third planned passenger vehicle, the FF 71 series, is expected to be a connected electric vehicle with a more compact size aiming at the mass market in the C-segment or D-segment.

The FF 71 will be designed to integrate full connectivity and advanced technology into a smaller vehicle size.

As FF is currently focusing on the development of the FF 91 and the FF 81, FF does not expect to start design and development of the FF 71 until 2023 and plans to launch the FF 71 Futurist configuration in the first quarter of 2025, assuming that sufficient funding is secured in a timely manner.

FF will start design and development of the FF 71 series after sufficient funding is secured in a timely manner.

FF 71 Futurist is expected to compete with vehicles such as the Porsche Macan, BMW X3, and Jaguar I-Pace.

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FF plans to provide purpose-built Smart Last Mile Delivery vehicles by leveraging its proprietary technologies developed for FF’s passenger vehicles, to build tailored SLMD configurations to meet the exact customer needs, whether for fleet provider or last mile delivery divisions, while reducing development time and costs.

FF’s technical solutions for advanced connectivity and user experience enable an easy integration of the SLMD as another device in the logistics system.

FF’s technical solutions for advanced connectivity and user experience are well-suited to the SLMD market, where rapid growth is fueling demand for increasingly sophisticated solutions and features.

Such features may include:

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● Equipped with Level 3 ready autonomy and ready-for-future capabilities.

• SLMD’s adaptive modular build enables additional use cases (utilities, tradesmen, and others) with minimal additional time or investment.

SLMD’s adaptive modular design enables additional use cases (utilities, tradesmen, and others) with minimal additional time or investment.

Manufacturing Strategy

FF plans to manufacture FF 91 series vehicles in its manufacturing facility in Hanford, California with a projected annual capacity of 10,000 vehicles.

FF plans to build FF 91 series vehicles in its manufacturing facility in Hanford, California with a projected annual capacity of 10,000 vehicles.

FF will conduct operations similar to traditional vehicle manufacturing facilities such as body assembly, paint operations, final vehicle assembly, and end-of-line testing for FF 91 in the Hanford manufacturing facility.

FF intends for its vehicle engineering and manufacturing teams to work alongside one another to streamline the feedback loop for rapid product enhancements and quality improvement and will extensively utilize virtual manufacturing simulation methods to validate operations and improve the manufacturing processes.

For additional capacity for production of the FF 91 (i.e., exceeding 10,000 vehicles annually), FF can expand production operations in Hanford or seek capacity expansion elsewhere.

For the FF 81, FF plans to outsource direct vehicle production to its contract manufacturing partner in South Korea, as FF believes outsourcing could reduce capital investment and accelerate its go-to-market strategy for launching the FF 81, while providing the benefit of flexibility to scale volume to match demand level.

FF may outsource the production of the FF 71 to its contract manufacture partner in South Korea or a manufacturing joint venture in China or elsewhere.

These plans align with FF’s asset-light, flexible manufacturing strategy.

For more information about FF’s manufacturing facility, see the discussion below under the heading “Facilities.” For more information about FF’s memorandum of understanding for contract manufacturing in South Korea, see the discussion below under the heading “Key Agreements and Partnerships.”

For additional capacity for production of the FF 91 ( i.e.

, exceeding 10,000 vehicles annually), FF can expand production operations in Hanford or seek capacity expansion elsewhere.

For the FF 81, FF plans to outsource direct vehicle production to its contract manufacturing partner in South Korea, as FF believes outsourcing will reduce capital investment and accelerate its go-to-market strategy for producing and delivering the FF 81, while providing the benefit of flexibility to scale volume to match demand level.

FF may outsource the production of the FF 71 to its contract manufacturing partner in South Korea or a manufacturing partner in China or elsewhere.

These plans align with FF’s hybrid, flexible manufacturing strategy.

For more information about FF’s manufacturing facility, see the discussion below under the heading “ – Facilities .” For more information about FF’s contract manufacturing and supply agreement with Myoung Shin in South Korea, see the discussion below under the heading “ – Key Agreements and Partnerships .”

Sales, Delivery, and Servicing of Vehicle

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FF plans to adopt a direct sales model that utilizes a mix of online and offline presence to drive sales.

FF’s offline sales network will consist of FF’s self-owned stores and FF Partner-owned stores and showrooms.

The self-owned stores are expected to establish FF brand awareness, while the FF Partner-owned stores and showrooms are expected to expand the sales and distribution network without substantial capital investment by FF.

FF plans to establish stores and showrooms in certain key markets, which may include Los Angeles, San Francisco, New York, Miami, Beijing, Shanghai, Guangzhou, Shenzhen, London, Paris, and Oslo, among other cities.

FF’s offline sales network will consist of FF experience centers and FF Partner-owned experience centers.

The self-operated experience centers are expected to establish FF brand awareness, while the FF Partner-owned experience centers are expected to expand the sales and distribution network without substantial capital investment by FF.

FF recently announced that its first flagship experience center will be located in Beverly Hills, California, and that the Company is currently looking for a second U.S.

FF expects to open other Company-operated experience centers in the U.S.

These locations will operate as experiential showrooms for FF’s electric vehicle models and will provide sales, aftersales, and charging services.

The FF Partner-owned stores and showrooms will support FF’s online-to-offline sales model, vehicle delivery, charging service and other user operations.

All purchase transactions will be processed online through FF’s website or mobile apps, while FF Partners will support the process (including demonstration drives and providing vehicle information) and receive compensation for sales based on

sales territory and/or services performed.

Users accessing FF.com can directly purchase the vehicle online and can choose their closest FF store or FF Partner-owned store and showroom for support.

Customers going to a FF Partner-owned store will be supported by staff and directed to FF.com for purchasing.

Users accessing FF.com can directly purchase the vehicle online and can choose their closest FF experience centers or FF Partner-operated experience centers and showroom for support.

Customers going to an FF Partner-operated experience centers will be supported by staff and directed to FF.com for purchasing.

FF believes that once the reputation of FF’s vehicles has been established and users are familiar with FF vehicles, an increasing share of the vehicle sales process is likely to be completed fully online.

This will further free up offline capacity and potentially increase productivity for FF’s Partner-owned stores.

As FF will oversee delivery of the vehicles, both FF stores and FF Partner-owned stores and showrooms will be able to run their operations with lower on-site inventory, keeping them asset light.

The FF Partner-owned stores and showrooms will be the prioritized network for servicing FF’s vehicles, which may include repair, maintenance, and bodywork services.

This will further free up offline capacity and potentially

increase productivity for FF’s Partner-operated experience centers.

As FF will oversee delivery of the vehicles, both FF stores and FF Partner-operated experience centers and showrooms will be able to run their operations in an asset-light fashion.

The FF Partner-owned experience centers and showrooms will be the prioritized network for servicing FF’s vehicles, which may include repair, maintenance, and bodywork services.

FF will also contract with select third-party service centers to ensure coverage and will deploy mobile service vans based on user demand.

To ramp up its service capabilities, FF U.S., FF’s primary U.S.

operating subsidiary, plans to enter into agreements with Somit Solutions and Cox Automotive to support the FF After-sales Systems and Operations.

To ramp up its service capabilities, FF Eco Sales Company, LLC, FF’s sales subsidiary, has engaged Somit Solutions and plans to engage Cox Automotive to support the FF After-sales Systems and Operations.

Somit Solutions will develop the underlying systems required to support all after-sales elements, such as warranty, parts catalog, repair manual systems.

Cox Automotive will support FF after-sales operations , such as roadside assistance, towing logistics, as well as leveraging Cox’s extensive service center network.

Cox Automotive is expected to support FF after-sales operations, such as shipping logistics, as well as leveraging Cox’s extensive service center network.

Additionally, FF users will benefit from FF’s connected remote service platform that can address a majority of service issues, perform remote diagnosis and OTA updates, perform artificial intelligence and predictive maintenance, and will be able to offer real-time service and repair status update to vehicle users.

FF has partnered with Tier-1 reputable, international suppliers in North America, Europe, and Asia.

FF has partnered with reputable suppliers in North America, Europe, and Asia.

FF has selected and on-boarded suppliers for all critical parts for the FF 91.

FF aims to obtain systems, components, raw materials, parts, manufacturing equipment, and other supplies and services from suppliers which FF believes to be reputable and reliable.

To expand the capacity for production of the FF 91 beyond FF’s Hanford plant, FF U.S.

entered into a memorandum of understanding to secure additional capacity for painted bodies through its contract manufacturing partner in South Korea.

FF also signed an agreement with the contract manufacturer in South Korea to reserve manufacturing capacity for the FF 81 in the same plant.

FF is also exploring other potential contract manufacturing options in addition to the contract manufacturer in South Korea.

FF aims to obtain systems, components, raw materials, parts, manufacturing equipment, and other supplies and services from suppliers which FF believes to be reputable and reliable.

Intellectual Property

FF has significant capabilities in the areas of vehicle engineering, development and design, and has developed a number of proprietary systems and technologies.

As of March 31, 2022, FF has been granted more than 650 patents (with approximately a third issued in the U.S., slightly less than two-thirds issued in China, and the remaining issued in other jurisdictions).

As of February 27, 2023, FF has been granted approximately 660 patents (with approximately a third issued in the U.S., slightly less than two-thirds issued in China, and the remaining issued in other jurisdictions).

FF intends to continue to file additional patent applications with respect to its technology.

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Strategic Partnership with Myoung Shin, South Korea

In February 2022, FF entered into a definitive contract manufacturing and supply agreement with Myoung Shin Co., Ltd.

In February 2022, FF U.S.

entered into a definitive contract manufacturing and supply agreement with Myoung Shin Co., Ltd.

(“Myoung Shin”), a South Korea-based automotive manufacturer and parts supplier, to manufacture the Company’s second vehicle, the FF 81.

The agreement has an initial term of nine years from the start of production of the FF 81, which is scheduled for 2024.

The agreement has an initial term of nine years from the start of production of the FF 81.

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entered into a non-binding memorandum of understanding with Zhejiang Geely Holding Group Co., Ltd.

(“Geely Holding”), who is also a subscriber in the Private Placement, pursuant to which the parties contemplate a strategic cooperation in various areas including engineering, technology, supply chain, and contract manufacturing.

(“Geely Holding”), who was also a subscriber in the Private Placement, pursuant to which the parties contemplate a strategic cooperation in various areas including engineering, technology, supply chain, and contract manufacturing.

In January 2021, Legacy FF, FF Automotive (Zhuhai) Co., Ltd.

and FF Hong Kong Holding Limited, and Geely Holding entered into a cooperation framework agreement and a license agreement that set forth the major commercial understanding of the proposed cooperation among the parties in the areas of potential investment into the JV, engineering, technology, and contract manufacturing support.

The cooperation with Geely Holding is temporarily on hold.

On September 7, 2021, the Company paid Liankong, a subsidiary of Geely Holding, which is also a subscriber in the PIPE Financing, in accordance with the Intellectual Property License Agreement dated January 11, 2021, as supplemented on September 7, 2021, a one-time amount of $50 million for a non-exclusive, perpetual, irrevocable, and sublicensable license to use a platform, the Geely License, owned by Liankong.

and FF Hong Kong Holding Limited entered into a cooperation framework agreement with Zhejiang Geely Holding Group Co., Ltd.

The joint venture and contract manufacturing projects with Geely Holding are on hold.

September 7, 2021, a one-time amount of $50.0 million for a non-exclusive, perpetual, irrevocable, and sublicensable license to use a platform, the Geely License, owned by Liankong.

The Geely platform is an electric automotive chassis that the Company plans to use in the development and production of future electric vehicle models.

Strategic Partnerships on FF Partner Stores and Other Sales and Service

FF Partner Stores in the U.S.

has entered into a non-binding memorandum of understanding with Jolta for setting up FF Partner-owned stores in the U.S.

for vehicle sales.

The memorandum of understanding contemplates a coverage by Jolta of approximately 15 major U.S.

cities by 2025 and 30 major U.S.

cities going forward.

FF Partner Stores in China

has entered into a non-binding memorandum of understanding with each of Harmony Auto, Topyoung, Huachi Fuwei, and Haipai to establish Partner-owned stores in more than 30 major cities in China for vehicle sales and service.

After-Sales and Service Offering

FF has plans to engage Somit Solutions to support developing the underlying after-sales Service Systems, Cox Automotive to support Aftersales Operations (US only), as well as SalesForce (US only) to launch and service the FF 91 in compliance with governmental agencies and to support Critical Path to deliver and service the first FF 91, in alignment with the company’s user journeys.

Human Capital Management

As of the date hereof, FF has 745 active employees globally.

After-Sales and Service

has engaged Somit Solutions to support developing the underlying after-sales Service Systems (U.S.

and China), plans to engage Cox Automotive to support Aftersales Operations (U.S.

only), and has engaged SalesForce (U.S.

only) to deliver and service the FF 91 in compliance with governmental agencies and to support Critical Path to deliver and service the first FF 91, in alignment with the Company’s user journeys.

Strategic Agreement with the City of Huanggang

On January 17, 2023, FF announced that, in the third quarter of fiscal year 2022, it had reached a non-binding Cooperation Framework Agreement with the government of the City of Huanggang in Hubei Province, China (“Huanggang”), for promoting FF’s U.S.-China dual-home market strategy.

According to the Cooperation Framework Agreement, FF intends to relocate its FF China headquarters to Huanggang, while maintaining its global headquarters in Los Angeles, California.

In accordance with the Cooperation Framework Agreement, both parties are expected to contribute their respective advantages in investment, scientific and technological innovation, industrial transformation, location, and policy.

Huanggang is expected to actively assist FF by providing assistance with industrial layout and deployment of resources and providing financial and policy support.

The FF China headquarters is expected to be jointly funded by the Huanggang Government guide fund, industrial fund, and FF.

Human Capital Management and Resources

As of February 27, 2023, FF had 586 employees globally.

A majority of FF’s employees are engaged in research and development and related engineering, manufacturing, and supply chain functions.

FF plans to ramp up additional hiring efforts for its targeted vehicle production and delivery.

To preserve its current cash position, FF may implement additional headcount reductions, taking into account FF’s financial condition and market conditions.

In the future, FF may ramp up additional hiring efforts for its targeted vehicle production and delivery.

FF’s targeted hires typically have significant experience working for reputable OEMs, software, internet, consumer electronics and artificial intelligence companies, as well as tier-one automotive suppliers and engineering firms .

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FF’s human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating existing and additional employees.

Faraday Future is committed to the principle of ESG and is committed to building a safer, cleaner world.

FF is committed to the principle of ESG and is committed to building a safer, cleaner world.

We have a diverse workforce and are committed to maintaining the highest standards of ethics and behavior.

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As a manufacturer, FF must self-certify that its vehicles meet all applicable FMVSSs before the vehicles are sold in the U.S.

There are many FMVSSs that will apply to FF vehicles, such as crash-worthiness requirements, crash avoidance requirements and electric vehicle requirements (i.e., limitations on electrolyte spillage, battery retention and avoidance of electric shock after certain crash tests).

There are many FMVSSs that will apply to FF vehicles, such as crash-worthiness requirements, crash avoidance requirements and electric vehicle requirements ( e.g.

, limitations on electrolyte spillage, battery retention and avoidance of electric shock after certain crash tests).

FF’s future vehicles must fully comply with all applicable FMVSSs.

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FF must also comply with the Automobile Information and Disclosure Act, which requires manufacturers of motor vehicles to disclose certain information regarding the manufacturer’s suggested retail price, optional equipment and pricing.

Further, this law allows inclusion of city and highway fuel economy ratings, as determined by EPA, as well as crash test ratings as determined by NHTSA.

Further, this law allows inclusion of city and highway range ratings, as determined by EPA, as well as crash test ratings as determined by NHTSA.

FF vehicles sold outside of the U.S.

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FF may sell FF future credits to automotive companies and other regulated entities who can use the credits to comply with emission standards and other regulatory requirements.

For example, under California’s Zero Emission Vehicle Regulation and those of states that have adopted California’s standards, vehicle manufacturers are required to earn or purchase credits, referred to as ZEV credits, for compliance with their annual regulatory requirements.

These laws provide that automakers may bank or sell to other regulated parties their excess credits if they earn more credits than the minimum quantity required by those laws.

FF may also earn other types of salable regulatory credits in the U.S.

and abroad, including greenhouse gas, fuel economy, and clean fuels credits.

Under the Environmental Protection Agency’s Light-Duty Vehicle Greenhouse Gas Emissions Standards, FF may generate carbon dioxide emissions credits that can be sold to conventional internal combustion engine vehicle manufacturers.

On December 30, 2021, EPA issued new greenhouse gas emissions standards for model years 2023-2026 light duty vehicles that accelerates the annual year-over-year increase in the stringency of the standards from 1.5% to 5-10%.

These standards include carbon dioxide emission credit multipliers for the sale of electric vehicles, and EPA predicts that the standards will result in electric and plug-in hybrid vehicles having a market share of approximately 17% by model year 2026.

Similarly, on August 25, 2022, the California Air Resources Board approved the Advanced Clean Cars II rule, which amends California’s existing Zero Emission Vehicle Regulation to require an increasing number of zero-emission vehicles starting with model year 2026 and growing to a 100% transition of light duty passenger vehicles to electric vehicles by model year 2035.

Under both federal and California regulations, FF may earn salable regulatory credits as vehicle manufacturers are

required to meet annual emissions or zero-emissions vehicle sales requirements or purchase commensurate offset credits.

FF may also earn similar fuel economy and clean fuels credits under other regulatory regimes in the U.S.

EPA Emissions and Certification

Clean Air Act requires that FF obtain a Certificate of Conformity issued by the U.S.

Environmental Protection Agency (“EPA”) or a California Executive Order issued by the California Air Resources Board (“CARB”) certifying that FF vehicles comply with all applicable emissions requirements.

Clean Air Act requires that FF obtain a Certificate of Conformity issued by the EPA or a California Executive Order issued by CARB certifying that FF vehicles comply with all applicable emissions requirements.

A Certificate of Conformity is required for vehicles sold in states covered by the Clean Air Act’s standards.

A CARB Executive Order is required for vehicles sold in states that have adopted

California’s stricter standards for emissions controls related to new vehicles and engines sold in such states.

A CARB Executive Order is required for vehicles sold in states that have adopted California’s stricter standards for emissions controls related to new vehicles and engines sold in such states.

States that have adopted the California standards as approved by EPA also recognize the CARB Executive Order for sales of vehicles.

In addition to California, there are 14 other states that have either adopted or are in the process of adopting the stricter California standards, including New York, Massachusetts, Vermont, Maine, Pennsylvania, Connecticut, Rhode Island, Washington, Oregon, New Jersey, Maryland, Virginia, Delaware and Colorado.

FF is required to seek an EPA Certificate of Conformity for vehicles sold in states covered by the Clean Air Act’s standards or a CARB Executive Order for vehicles sold in California or any of the other 14 states identified above that have adopted the stricter California standards.

In addition to California, there are 17 other states that have either adopted or are in the process of adopting the stricter California standards, including New York, Massachusetts, Vermont, Maine, Pennsylvania, Connecticut, Rhode Island, Washington, Oregon, New Jersey, Maryland, Virginia, Delaware, Colorado, Minnesota, Nevada, Virginia, and New Mexico.

FF recently achieved CARB certification for the FF 91 and achieved an EPA attested range of 381 miles.

Starting in model year 2026, FF must also meet California data standardization requirements for zero-emission vehicles, which specifies required vehicle and battery data that must be made available to vehicle owners through a scan tool device.

Regulation– – Self Driving

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state laws regulate the manufacture, distribution and sale of automobiles, and generally require motor vehicle manufacturers and dealers to be licensed in order to sell vehicles directly to consumers in the state.

FF will need to secure dealer licenses (or their equivalent) and engage in sales activities for its self-owned stores and service centers, while partners in certain states will support by providing services via partner-owned stores and showrooms.

FF has received its dealer license from the State of California.

FF will need to secure dealer licenses (or their equivalent) and engage in sales activities for its self-operated experience centers and service centers, while partners in certain states will support by providing services via partner-owned experience centers and showrooms.

has received its dealer license from the State of California and is able to sell automobiles across the U.S.

In China, automobile suppliers and dealers are required to receive a business license and file and update the relevant information through the information management system for the national automobile circulation operated by the competent commerce department in China.

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Many established and new automobile manufacturers have entered or have announced plans to enter the alternative fuel and electric vehicle market.

Many major automobile manufacturers, such as Tesla, Porsche, Mercedes, and Audi, have electric vehicles available today.

Other current and prospective automobile manufacturers are also developing electric vehicles, for example Nio, xPeng, Li Auto, Canoo and Fisker, among others.

Many major automobile manufacturers, such as Tesla, Porsche, Mercedes, Rolls Royce and Audi, have electric vehicles available today.

Other current and prospective automobile manufacturers are also developing electric vehicles, for example Nio, xPeng, Li Auto, Lucid Motors, Canoo and Fisker, among others.

In addition, several manufacturers offer hybrid vehicles, including plug-in versions.

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FF believes the primary competitive factors in the electric vehicle market include, but are not limited to:

• technological innovation;

• vehicle performance, quality, and safety;

● technological innovation, recently enhanced through PT Gen 2.0;

● vehicle performance, quality, safety and reliability;

● space, comfort, and user experience;

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They may be able to deploy greater resources to the design, development, manufacturing, supply chain, distribution, promotion, sales, marketing, and support of their electric vehicles.

Additionally, FF’s competitors may also have greater name

recognition, longer operating histories, lower cost of materials, larger sales forces, broader customer and industry relationships, and other resources than FF does.

Additionally, FF’s competitors may also have greater name recognition, longer operating histories, lower cost of materials, larger sales forces, broader customer and industry relationships, and other resources than FF does.

Enforceability

Certain of our current operations are conducted in the PRC through our wholly owned subsidiaries.

Moreover, one of our current directors and our Global CEO are residents of the PRC.

All or a substantial portion of the assets of these persons are located outside the U.S.

and in the PRC.

As a result, it may not be possible to effect service of process within the U.S.

or elsewhere outside the PRC upon these persons.

In addition, uncertainty exists as to whether the courts of the PRC would recognize or enforce judgments of U.S.

courts obtained against us or such director predicated upon the civil liability provisions of the securities laws of the U.S.

or any state thereof, or be competent to hear original actions brought in the PRC against us or such director predicated upon the securities laws of the U.S.

or any state thereof.

See “ Risk Factors – Risks Related to FF’s Operations in China – There may be difficulties in effecting service of legal process, conducting investigations, collecting evidence, enforcing foreign judgments or bringing original actions in China based on United States or other foreign laws against us and our management .”

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business