Fisker faces massive problems

Fisker is navigating rough waters: The company had trouble selling the electric SUV Ocean in sufficient numbers after a key supplier went bankrupt and high interest rates led to a demand weakness. According to Fisker, the current resources are "not sufficient" to bridge the next 12 months.

Although Fisker manufactured more than 10,000 vehicles in 2023 - less than a quarter of its original forecast - it only delivered about 4,700. In Germany, the KBA recorded a total of 239 Fisker new registrations in 2023.

Fisker needs more dealers and sales outlets

This is why Fisker wants to add dealers to its direct sales model to expand its delivery network. So far, Fisker has contracted 13 dealer partners in the USA and Europe. Fisker said its business plan is "heavily dependent" on the successful transition to the new dealer partner model this year. Fisker stated:

"2023 was a challenging year for Fisker, including delays from suppliers and other issues that prevented us from delivering the Ocean SUV as quickly as we had expected."

Is an OEM stepping in?

The company was in talks with five car manufacturers about a partnership to secure additional production capacities, Fisker told Reuters at the end of 2023. On Thursday, he said the discussions had narrowed down to one automaker and a deal would include the joint development of one or more electric vehicle platforms as well as production in North America. Many traditional car manufacturers lagged behind in the EV race, and a deal with a startup would help them enter the market, Fisker hopes. The company's CFO, Geeta Fisker, Fisker's wife, stated:

"It saves time, saves costs, and what we've really focused on in discussions with car manufacturers is sharing the technology, following the investments we have already made."

Last year, Fisker unveiled an electric pickup, Alaska, for $45,000 and a smaller SUV, PEAR, for $29,990. But the projects depend on the partnership. Yet, these are hanging by a thread, as Fisker explains:

"We don't plan to start external expenses for our next projects until we have secured a strategic partnership."

Recently, Fisker reported preliminary revenues of $200.1 million for the fourth quarter of 2023, missing the average analyst estimate of $310.8 million, according to LSEG data. The net loss expanded to $463.6 million, compared to $170 million the previous year.

In addition to talks with the major car manufacturer, Fisker was in discussions with a creditor about a potential investment. Fisker stated it plans to deliver between 20,000 and 22,000 Oceans in 2024, which represents a significant leap forward, but to truly take off, it would need to quickly reach six-figure numbers.

Without additional funding, the company could be forced to reduce Ocean production, cut investments, scale back operations, and lay off more employees. Fisker's comments followed disappointing production forecasts from larger competitors Rivian and Lucid, as high borrowing costs dampened consumer sentiment and sharply slowed demand for EVs, which are typically more expensive than gasoline-powered vehicles. He also announced it would reduce its workforce by about 15%.