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Electric vehicle (EV) startup Fisker issued a stark warning, expressing doubts about its ability to sustain operations as a going concern, causing its shares to plummet by 35% after the stock market closed.
Workforce Reductions and Investment Talks:
Fisker announced plans to slash its workforce by approximately 15% and revealed ongoing discussions with a major automaker for a potential investment and collaborative development partnership. However, specifics regarding the automaker and financial terms remained undisclosed.
The company cited difficulties in selling its flagship Ocean electric SUV, attributing sluggish demand to high-interest rates. Fisker acknowledged that existing resources might not suffice to cover expenses over the next 12 months.
Financial Strain and Production Cuts:
In addition to engagement with the automaker, Fisker disclosed negotiations with a debt holder for a potential investment. The company warned of potential production cutbacks, reduced investments, operational downsizing, and further job cuts without additional financing.
Fisker’s struggles coincide with disappointing production forecasts from industry peers Rivian and Lucid, as high borrowing costs dampen consumer enthusiasm for EVs, particularly those priced higher than traditional gasoline-powered vehicles.
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CEO’s Perspective and Delivery Challenges:
CEO Henrik Fisker acknowledged challenges faced in 2023, including supply chain disruptions and production delays hindering Ocean SUV deliveries.
Despite manufacturing over 10,000 vehicles, Fisker delivered only around 4,700 units, a fraction of initial projections.
Fisker aims to expand its delivery network by adding dealerships alongside its direct-to-consumer model and is exploring partnerships with automakers to secure additional production capacity and accelerate technological advancements.
Financial Performance and Revenue Miss:
The company reported preliminary fourth-quarter revenue of $200.1 million, falling short of analyst expectations of $310.8 million. Additionally, Fisker’s net loss widened to $463.6 million, compared to $170 million the previous year.
