According to Reuters, electric vehicle startup Fisker issued a warning on February 29th, stating that without new financing, the company might not be able to sustain operations. Consequently, the company's stock plummeted by 35% after the stock market's close. Fisker also announced a plan to cut approximately 15% of its workforce and revealed negotiations with a large automaker regarding potential investment and joint development partnerships, without disclosing the name of the automaker or financial details of the potential transactions.
Due to slowed demand caused by high interest rates, Fisker has been struggling to sell its flagship model, the Ocean electric SUV. The company stated that its current resources are "insufficient" to support operations for the next 12 months. Apart from negotiations with large automakers, Fisker is also in discussions with creditors regarding potential investments.
Fisker plans to deliver 20,000 to 22,000 units of the Ocean electric vehicle in 2024. However, without additional financing, the company may need to reduce Ocean's production, lower investments, scale down operations, and further downsize its workforce.
Not only Fisker but also larger-scale startups like Rivian and Lucid have previously announced disappointing production expectations. These expectations indicate that high borrowing costs have affected consumer confidence and significantly slowed demand for electric vehicles, as electric vehicles are generally more expensive than gasoline-powered vehicles.
"2023 was a challenging year for Fisker, with supplier delays and other issues preventing us from delivering the Ocean SUV as quickly as expected," said Henrik Fisker, CEO of Fisker.
Although Fisker manufactured over 10,000 vehicles in 2023, this number was less than a quarter of its initial forecast, with only approximately 4,700 units delivered.
Last month, Fisker announced plans to increase dealerships to expand its sales network, parallel to its previous direct-to-consumer distribution model. So far, Fisker has signed 13 dealership partnerships in the United States and Europe. Fisker stated that its business plan "highly depends" on the new dealership partnership model for this year.
Furthermore, at the end of last year, Fisker stated that it had been in negotiations with five automakers for cooperation to ensure additional production capacity. On February 29th, Fisker announced that the negotiations had narrowed down to one automaker, and the deal would include joint development of one or more electric vehicle platforms and manufacturing capabilities in North America. Many traditional automakers have lagged behind in the electric vehicle race, and cooperation with Fisker will help them enter the market quickly.
"This saves time and costs. What we are really focusing on in negotiations with automakers is sharing technology, and technology is our investment," said Geeta Fisker, CFO of Fisker, during a conference call.
Last year, Fisker introduced a $45,000 electric pickup truck, Alaska, and a $29,990 compact SUV, PEAR. However, these projects depend on partnerships. "We don't plan to start external spending on the next project until we have established strategic partnerships," Henrik Fisker said during the earnings conference call with analysts.
On February 29th, Fisker reported preliminary revenue of $200.1 million for the fourth quarter of 2023, falling short of analysts' average estimate of $310.8 million. Net loss expanded from $170 million in the same period of 2022 to $463.6 million.
For the full year of 2023, Fisker's total revenue was $272.9 million, with a gross profit of negative $102.9 million; the annual net loss was $761.9 million, with a loss per share of $2.22. As of December 31, 2023, Fisker's total cash, cash equivalents, and restricted cash amounted to $395.9 million, and the book value of completed vehicles and raw materials in inventory was approximately $530 million.
