Alongside negotiations with the large automaker, the company also mentioned talks with a debt holder for a possible investment
Fisker, an EV startup, raised concerns about its financial stability, causing its shares to drop by 35% after the stock market closed. The company announced plans to reduce its workforce by approximately 15% and revealed ongoing discussions with a major automaker regarding a potential investment and partnership for joint development.
Fisker did not disclose the identity of the automaker or the financial details of the potential arrangement. Facing challenges in selling its primary product, the Ocean electric SUV, due to high interest rates impacting demand, Fisker stated that its current resources would not be adequate to cover the upcoming 12 months.
Alongside negotiations with the large automaker, the company also mentioned talks with a debt holder for a possible investment. Fisker aims to deliver between 20,000 and 22,000 Ocean vehicles by 2024, but without additional financing, it may need to reduce production, decrease investments, scale back operations, and further reduce jobs.
Fisker’s announcement came after disappointing production forecasts from its larger competitors, Rivian and Lucid, as increased borrowing costs have dampened consumer interest and significantly slowed the demand for EVs, which are typically pricier than gasoline-powered vehicles.
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, CEO Henrik Fisker said.
Struggling to fulfil customer vehicle orders, Fisker manufactured over 10,000 vehicles in 2023, falling short of its initial projections by three-quarters and delivering only about 4,700 units.
To enhance its delivery network, Fisker disclosed plans to establish additional dealerships alongside its existing direct-to-consumer distribution model. The company has already secured 13 dealer partners across the U.S. and Europe. Fisker emphasized that its business strategy relies heavily on a successful transition to the new dealer partner model this year.
In pursuit of securing more production capacity, the company has been engaged in discussions with five automakers for potential partnerships, narrowing down the talks to one automaker, with plans for joint development of electric vehicle platforms and manufacturing in North America.