Electric vehicle manufacturer Fisker recently made a strategic decision to curtail production in December, opting to produce fewer cars than initially projected. The move, aimed at preserving cash reserves and unlocking over $300 million of working capital, raises questions about the company's ability to meet its ambitious electric vehicle plans.
In a statement, Fisker acknowledged the decision to reduce December production, citing a priority on liquidity for enhanced business flexibility. This follows a second production target cut in 2023, bringing the estimate to just over 10,000 cars, significantly less than the initially planned quarter for the Fisker Ocean model.
Despite the reduction in production targets, Fisker's CEO, Henrik Fisker, remains optimistic, stating that the company is navigating challenges and accelerating sales and deliveries. Fisker highlighted the impressive pace set by its teams in overcoming early delivery challenges, emphasizing considerable revenue as the business ramps up.
Customer deliveries, which amounted to just 1,108 units at the end of Q3 and over 3,000 by mid-November, have seen improvement. However, with potential bottlenecks in deliveries, the company aims to prioritize liquidity before increasing production further.
Henrik Fisker expressed confidence in the company's performance, stating that despite not meeting the original forecast, Fisker is doing well considering current market conditions and negative sentiments around EV sales. The company expects to surpass the delivery performance of other Western EV startups in their first year.
Fisker is actively expanding into new markets, with customer deliveries set to commence in Canada in December. Despite entering smaller markets, the company anticipates growth and aims to convert reservation holders to orders in 2023 while maintaining this process into 2024.
An interesting aspect is Fisker's strategy to generate cash through the sale of EPA Greenhouse Gas emission credits in the U.S. and by entering into an emission pooling agreement in Europe with other manufacturers. Additionally, ongoing discussions with strategic partners and automakers, as well as potential undisclosed deals, indicate a dynamic landscape for Fisker in the coming months.