Fisker Announces Layoffs and Financial Struggles in Pivotal Year
Electric vehicle startup Fisker has revealed plans to lay off 15% of its workforce—affecting nearly 200 employees—while warning investors it may not have sufficient cash to sustain operations over the next 12 months. The announcement sent its stock plummeting 35% in after-hours trading.
Financial Pressures and Strategic Shifts
- Cash Reserves: Fisker ended 2023 with $396 million in cash, but $70 million is restricted.
- Fundraising Efforts: The company is negotiating with an unnamed lender for additional investment and exploring partnerships with a “large automaker” for joint EV development and North American manufacturing.
- Dealership Transition: Fisker is shifting from direct sales to a dealership model, though only 13 dealers have signed agreements despite interest from 250.
Operational Challenges
- Unsold Inventory: Fisker holds $500+ million worth of unsold Ocean SUVs, its flagship model.
- Production Hurdles: Outsourced manufacturing to Magna Steyr in Austria excluded the Ocean from U.S. federal EV tax credits, impacting competitiveness.
- Software Issues: The Ocean SUV faced reports of brake failures and rollaway incidents, prompting an NHTSA investigation. A major software update (v2.0) began rolling out this week to address these concerns.
Broader EV Market Slowdown
Fisker’s struggles mirror wider industry headwinds:
- Rivian cut 10% of its workforce and paused production growth.
- Lucid Motors scaled back its 2024 production target from 90,000 to just 9,000 vehicles.
Leadership’s Outlook
CEO Henrik Fisker acknowledged a “difficult year” ahead, emphasizing cost-cutting and partnerships to survive. The company sold 4,929 Oceans in 2023, generating $273 million in revenue but reporting a $761 million net loss.
Regulatory and Internal Risks
- Material Weaknesses: Fisker delayed its 2023 financial results due to internal reporting flaws, including issues with revenue recognition.
- Executive Turnover: Two chief accounting officers resigned in late 2023.
The Road Ahead
Fisker’s survival hinges on securing capital and finalizing automaker partnerships. Its asset-light model—once a differentiator—now poses challenges as it navigates production bottlenecks and a softening EV market.
“We have put a plan in place to streamline the company as we prepare for another difficult year.”
— Henrik Fisker, CEO and Founder
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