Weekly Report 049 | FF2026 Delivers 1000+ Robots, Building the First EAI Education System in the U.S.

Q1: Mr. Jia, you mentioned that the most important point in this earnings report is that the company's net assets turned from negative to positive. What happened behind this?

Actually, there's a tough story behind it. Last year, just two days before the Q3 earnings report was to be released, we were hit with a "heavy blow." Based on very conservative accounting principles, the auditor performed a one-time large impairment on the equipment and molds for the FF 91 that had low utilization in the short term, amounting to approximately $130 million, which accounted for almost two-thirds of the overall loss for the period. This directly pushed the company's book net assets into negative territory and even caused a two-day delay in the Q3 earnings release.

At that time, to file the report quickly, we had no choice but to accept this result. We were very frustrated and felt very sorry to our investors. Subsequently, we conducted deep reflection and quickly initiated debt optimization and a series of emergency remedial measures. Through continuous communication with creditors such as suppliers, our company's strategy gained their understanding. With their strong support, we finally successfully completed about $100 million in debt optimization and forgiveness, ultimately achieving this turnaround from negative to positive. We are very grateful to them.

Q2: The EAI robot business achieved positive gross margin on a per-unit basis in its first quarter of deliveries and set a target of shipping over 1,000 units in 2026. What does this mean for the entire company? Which areas will we focus on?

This is the first time FF has achieved positive gross margin on a per-unit basis since its inception, and it is indeed significant.

First, going from 0 to 1 is crucial. It validates the feasibility of the FF EAI robot's "launch-to-sales, sales-to-delivery, delivery-to-positive-gross-margin" model.

Second, we hope to achieve positive operating cash flow and move towards profitability more quickly, which will also be a huge help for the financing we are currently advancing.

Third, FF's unique co-creation ecosystem and online direct sales system are strongly driving the rapid achievement of our strategic goals.

Fourth, we are accelerating the implementation of the "Terminal Revenue + Skills Revenue + Data Revenue" ecosystem revenue model and continuously amplifying our "Terminal - Data - Brain" cyclical evolution flywheel effect as the first company in the US to deliver humanoid and bionic robots. We hope to replicate Tesla's flywheel effect in electric vehicles, data, and FSD within the EAI robot industry.

Next, to complete this year's target of shipping over 1,000 units as soon as possible, we will promote the phased and step-by-step implementation of the "633" plan.

The core scenarios in the first phase will be divided into two major areas: To B and To C. We have already systematically introduced the key To B scenarios before, so we won't elaborate further today. In the To C area, family education will become our first core scenario, focusing on education, learning, and growth companionship in the AI era, helping children become leaders in the AI era.

We have already started discussions with relevant departments of the California government, hoping to start from California, unite all school districts, and establish AI robot laboratories and the first large-scale EAI education system in the US within K12 education and UC system public universities, including UCLA and UC Berkeley.

Q3: You mentioned Tesla. Recent forecasts show that the revenue share of FSD and robots will exceed 50% for the first time in 2027. What's your take on this?

You asked a very good question. We believe that the competition for tech companies now and in the future will be a competition of AI, data, and ecosystem capabilities. Whoever can first complete the transition from "selling hardware" to "selling AI, services, data, and ecosystems" will become the winner and define the next generation of industry structure.

At the same time, from an industry scale perspective, the output value of the embodied AI industry will surpass that of the automotive industry in the future. Perhaps one day in the future, each of the 7 billion people globally will have their own EAI agent. This industry will soon experience explosive growth.

Q4: Your son was recently admitted to Stanford's CS program, and this even made it to the trending list. Could you share some secrets with all the parents?

I wouldn't call it secrets; in fact, I feel a bit ashamed. Over the years, I haven't been of much help in my child's growth, especially in daily life. He received offers from many top universities based on his own hard work and excellent grades.

If I must say it's related to me, it might be that my son has been interested in computers and AI since he was young and had a clear direction early on, which is very important. More importantly, during his middle and high school years in K12, he tried to intern at AI companies like FF during every holiday, which made him understand what to learn and why he was learning it, and also accumulated a lot of practical AI experience. This might be one of the important considerations for his admission to prestigious schools like Stanford.

Soon, I will purchase several FF robots for my children to use for learning, secondary development in higher education, and exploration of K12 educational scenarios.

I hope our experience can provide some inspiration to all parents. This is also why we are making education and growth companionship our first core scenario in the first phase. We hope to further create AI and EAI educational environments and practical opportunities for parents and children in school and family education.

Alright, that's all for today's questions. Next week, I will answer questions about Super One, capital, and the ten major transformation upgrades. Stay tuned.$Faraday Future Intelligent Electric(FFAI.US)