Fisker, an electric vehicle startup, is facing financial difficulties and is planning to lay off 15% of its workforce. The company is struggling to raise enough cash to survive the next 12 months. Founder and CEO Henrik Fisker mentioned that they are streamlining the company for another challenging year. With over 1,300 employees, the layoffs could impact close to 200 people. The company’s share price dropped 35% in after-hours trading.
Fisker ended 2023 with $396 million in cash, but $70 million is restricted. They are in talks with lenders for additional investment and negotiating with a large automaker for a potential transaction. Fisker executives stated that they won’t invest more money in future products without partnering with another automaker, putting the fate of upcoming models in question.
The company is transitioning to a wholesale model through dealer partnerships, which has negatively affected sales. Fisker has inventory worth over $500 million and has received interest from 250 dealerships, signing up only 13 so far. The Ocean SUV, the company’s only model, has faced issues with sudden brake failure and vehicle rollaway incidents.
Fisker sold nearly 5,000 Ocean SUVs in 2023, generating $273 million in revenue but losing close to $761 million. The company aims to start shipping vehicles to new dealer partners to generate cash. Fisker, known for its asset-light business model, outsources manufacturing to Magna Steyr in Austria. This decision helped get cars on the road quickly but has posed challenges, like ineligibility for federal EV tax credits.
As with many EV startups, Fisker has faced challenges since going public. It had to delay financial results due to internal reporting weaknesses and had chief accounting officers resign. The company will be late reporting full 2023 financial results and has discovered more financial weaknesses. The financial figures released are labeled as “preliminary.”
