Things aren't looking great for Fisker. The California-based EV startup warned investors that it may not have enough cash to survive the next 12 months.
The firm said it's trying to raise more funds and hopes to strike a deal with an unnamed automaker. It is also looking to cut costs by laying off 15% of its staff.
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Fisker's rough road ahead
U.S. EV startup Fisker launched its debut product, the Ocean SUV, in 2022. It's struggling with cash burn and is warning investors of a "difficult" year ahead.
"To the extent Fisker’s current resources are insufficient to satisfy its requirements over the next 12 months, the company will need to seek additional equity or debt financing, and there can be no assurance that Fisker will be successful in these efforts," the company said in its fourth-quarter earnings release.
"If the financing is not available, or if the terms of financing are less desirable than Fisker expects, the company may be forced to decrease its planned level of investment in product development, scale back its operations including further headcount reductions, and reduce production of the Fisker Ocean, which could have an adverse impact on the company’s business and financial prospects," Fisker added.
The company's shares plunged roughly 36% in after-hours trading on the news.
The company said its future largely depends on its ability to successfully transition from a direct-sales model to a dealership model. It said a large portion of the layoffs are a result of that switch, which will see the company outsource vehicle sales to car dealers.
Moreover, Fisker's cash-strapped situation is putting its future products in jeopardy. Last year, the startup unveiled ambitious plans for an affordable compact SUV, a pickup truck and a supercar to follow up its debut product, the Ocean SUV.
Now, CEO Henrik Fisker says, the company is prioritizing the Alaska pickup truck, ahead of even the compact Pear. He said Fisker won't dump any more money into future product development unless it strikes a partnership with another carmaker.
"We see that the biggest opportunity for growth and I think profitability, and getting speed to market is with the Alaska, so the internal team are now focused on Alaska," he said. "Pear obviously would also be important as well, because it's a very, you know, affordable vehicle, but we do have to prioritize."
A relationship with another manufacturer is in the works, Fisker says, but the details are still hazy.
"Fisker is in negotiations with a large automaker for a potential transaction which could include an investment in Fisker, joint development of one or more electric vehicle platforms, and North America manufacturing," the CEO said in a statement.
Fisker launched the Ocean SUV in late 2022 and has struggled to scale up sales. Last year, it produced more than 10,000 Oceans through its manufacturing partner Magna Steyr, but only managed to sell just under 5,000 of them to customers. In late 2022, Fisker said it expected to churn out well over 42,400 oceans in 2023. Some of the vehicles it has sold have been plagued with quality issues, TechCrunch and InsideEVs have reported.
This year, Fisker says it plans to deliver 20,000-22,000 Ocean SUVs globally.
Fisker said it knows what it needs to do to turn things around, but signaled that the journey won't be easy.
"[T]aking the lessons learned from 2023, we have put a plan in place to streamline the company as we prepare for another difficult year," Henrik Fisker said in a statement.
Contact the author: tim.levin@insideevs.com
