Dive Brief:
- Fisker Inc. is negotiating “a potential transaction” with a large automaker, the electric vehicle startup said in a press release disclosing financial results Thursday.
- The prospective deal may include an investment in Fisker, jointly developing at least one EV platform and manufacturing in North America.
- Fisker also announced it plans to slash its staff by 15% and warned it “expects to conclude there is substantial doubt about its ability to continue" when it discloses going concerns as part of its annual financial statements.
Dive Insight:
Fisker dealt with production delays and poor vehicle sales in 2023, losing $464 million in Q4 and $762 million for the full year — leading the company’s stock price to plummet. Earlier this month, the New York Stock Exchange threatened to delist the fledgling automaker if it could not boost its share price above $1 per share within six months.
“2023 was a challenging year for Fisker, including delays with suppliers and other issues that prevented us from delivering the Ocean SUV as quickly as we had expected,” Fisker Chairman and CEO Henrik Fisker said in a statement. “We also encountered unexpected headwinds in our efforts to establish a direct-to-consumer sales model in both North America and Europe at the same time.”
The company struggled with high interest rates, labor shortages and a lack of appropriate real estate for retail stores, the CEO said.
In an effort to boost sales and revenue, Fisker announced in January that it would abandon its direct-to-consumer sales model and sell vehicles through dealers. More than 250 dealers worldwide are interested in selling Fisker’s vehicles, with 13 dealers signing agreements as of Thursday, according to the company. Industry experts have said DTC sales are probably not a viable option for EV startups other than Tesla, causing them to sign up dealers.
“The company’s business plan is highly dependent on the successful transition to its new Dealer Partner model in 2024,” the company wrote in the press release.
While the transition to dealer sales has negatively affected Fisker’s sales in the short term, the CEO said the EV startup is "beginning to see the benefits of the Dealer Partner model as dealers have the potential to order more cars than we would have been able to sell to customers.”
Even so, the moves may be too little, too late. Fisker doesn’t have enough money to last another 12 months, even though the automaker expects its costs to decline substantially following the launch of its Ocean SUV, according to the press release. In addition, the company needs to obtain additional financing and cut costs to survive but may not be able to.
“The company is currently in discussions with an existing noteholder about potentially making an additional investment in the company,” the company wrote in the press release. “The use of proceeds, if a transaction is consummated, is expected to be for general corporate purposes, vehicle production and the ongoing transition to a dealer-focused sales model.”
In addition, the automaker plans to streamline its operations by “reducing its physical footprint” and expenses. The staff cuts are mostly related to the change in sales strategy, the company said.
Fisker plans to deliver up to 22,000 Ocean vehicles to customers in 2024 after delivering just over 4,900 EVs last year.
