Fisker deal with Taiwanese electronics manufacturer Foxconn to produce a sub-$30,000 electric crossover in the United States is yet to reach a definitive conclusion, according to remarks made by Fisker founder and CEO Henrik Fisker during an interview with TechCrunch.
The Foxconn-Fisker agreement, initiated in February 2021 through a memorandum of understanding, aimed to produce 250,000 electric vehicles (EVs) annually. Though the specific model to be manufactured was initially unclear, Fisker had been working on the Personal Automotive Electric Revolution (PEAR) – an affordable EV designed for city and urban environments, priced below $30,000. By May 2021, the two companies had inked a formal agreement, setting their production expectations in writing.
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However, Foxconn’s history of backing out of other manufacturing agreements raised concerns about the stability of the deal. The company previously entered into a separate arrangement with EV manufacturer Lordstown Motors, which later faced financial difficulties and filed for bankruptcy, leading to a lawsuit against Foxconn for “fraudulent conduct” due to unfulfilled promises.
Despite the uncertainty surrounding the Foxconn-Lordstown deal, Fisker remains optimistic about the PEAR vehicle and its partnership with Foxconn. Recently, Fisker unveiled a finalized prototype of the PEAR, expressing aspirations to produce up to 1 million vehicles per year across multiple global plants, including those in the U.S., Europe, China, and India. Preorders for the Fisker PEAR have also been made available.
A Fisker spokesperson reassured that the ongoing legal dispute between Foxconn and Lordstown Motors would not impede Fisker’s plans to build the PEAR at the Foxconn Lordstown plant. However, Henrik Fisker acknowledged that certain details still need resolution before the deal’s finalization. Both parties seek additional information, particularly from suppliers, to ascertain the exact assembly cost.
Creating a sub-$30,000 EV is a challenge that no other automaker has successfully achieved yet. Past attempts, such as GM’s $26,595 Bolt, have reportedly incurred significant losses on each unit sold. While some affordable EV models like Hyundai’s Ioniq 5 and 6 exist, they start in the mid-$40,000 range. Tesla’s plans for a sub-$30,000 Model S were ultimately scrapped in 2022.
See also: Fisker Commences Reservations for New EV Models: Ronin Convertible and Alaska Pickup
Fisker has positioned the PEAR at a base price of $29,900 before incentives and tax rebates, with the cost further reduced to $22,400 after incentives. To minimize expenses, the company has streamlined the manufacturing process by reducing the number of parts required by 35%. Additionally, Fisker aims to save costs by producing its own supercomputers for the vehicles and optimizing the PEAR’s assembly process for speed and efficiency.
Henrik Fisker anticipates that the deal with Foxconn will be fully concluded within the next three months. The company’s focus is on swift market entry, with over 1,000 orders already received for their new Alaska pickup, set to be manufactured and sold in the U.S. Fisker’s strategy revolves around delivering innovative products that appeal to consumers, seizing market share, and cementing a strong position in the competitive EV market.
