Fisker issued a warning on Thursday, stating it might not be able to continue as a going concern, leading to a 35% tumble in its shares after the stock market closed.
The company announced plans to cut its workforce by about 15% and disclosed ongoing talks with a large automaker for a potential investment and joint development partnership, without disclosing the name of the automaker or details of the potential deal.
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Fisker has faced challenges in selling its flagship Ocean electric SUV, with high interest rates leading to a slowdown in demand. The company stated that current resources were “insufficient” to cover the next 12 months. Besides talks with the large automaker, Fisker is also in discussions with a debt holder about a potential investment. The company aims to deliver between 20,000 and 22,000 Ocean vehicles in 2024 but stated that without additional financing, it might be forced to reduce production of Ocean, decrease investments, scale back operations, and cut jobs further.
Fisker’s announcement follows disappointing production forecasts from larger peers Rivian and Lucid, as high borrowing costs have dampened consumer sentiment and sharply slowed demand for EVs, which are typically more expensive than gasoline-powered vehicles.
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“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,” said CEO Henrik Fisker.
The company has been struggling with delivering vehicles to customers, producing over 10,000 vehicles in 2023, less than a quarter of its initial forecast, and delivering only about 4,700.
Fisker recently announced plans to add dealerships alongside its direct-to-consumer distribution model to expand its delivery network, signing 13 dealer partners across the U.S. and Europe so far.
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Fisker emphasized that its business plan was “highly dependent” on the successful transition to the new dealer partner model this year. The company has been in talks with five automakers over a partnership to secure additional production capacity, narrowing down the discussions to one automaker. The deal would include joint development of one or more electric vehicle platforms and North America manufacturing.
“It saves time, saves cost and where we’ve been focusing on in talking to automakers is really to share the technology, the investments we’ve made,” said the company’s finance chief Geeta Fisker.
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Last year, Fisker unveiled a $45,000 electric pickup, Alaska, and a smaller SUV, PEAR, priced at $29,990, with the projects depending on the partnership. Henrik Fisker stated, “We are not planning to start external expenditure on our next projects until we have a strategic partnership in place.”
For the fourth quarter, Fisker reported preliminary revenue of $200.1 million, missing the average analyst estimate of $310.8 million, according to LSEG data. Net loss widened to $463.6 million from $170 million a year ago.
