Electric vehicle startup Fisker plans to lay off 15% of its workforce and says he probably doesn’t have enough cash to see him through the next 12 months. The company says it is trying to find a way to raise that money as it operates through a pivot from direct sales to a dealership model.
“[W]we have put in place a plan to streamline the company as we prepare for another challenging year,” founder and CEO Henrik Fisker said in a statement. Fisker reported more than 1,300 employees at the end of September 2023, meaning the cut could affect nearly 200 people. The company’s share price plunged 35% in after-hours trading.
Fisker said Thursday that it ended 2023 with $396 million in cash, although $70 million of that is restricted. The company says it is in talks with one of its lenders about making “an additional investment” in the company. It also claims it is “in negotiations with a major automaker for a potential transaction that could include an investment in Fisker, the joint development of one or more electric vehicle platforms, and manufacturing in North America.”
Such a partnership will be crucial, as Fisker executives said in a phone call Thursday that it will not invest any more money in its future products unless it partners with another automaker. That means the fates of a truck, a compact EV, and other models that Fisker has teased are now in doubt.
The company’s financial difficulties come as it tries to move to a wholesale model based on partnerships with dealers, a change that Fisker says has “negatively impacted” its sales so far. It currently stocks thousands of vehicles that have a total value of over $500 million. Fisker says it has received interest from about 250 dealerships, but has only signed 13 to date.
Fisker has also run into a number of issues with its Ocean SUV, its only model so far, as TechCrunch reported earlier this month. The company said it fixed some issues with a software update in December and planned to fix many more in a larger 2.0 update earlier this month, but that only started arriving in customer vehicles this week. It is currently being investigated by the National Highway Traffic Safety Administration for reports of sudden brake failure, as well as some vehicle rollover incidents.
Several major automakers are backing away from their aggressive EV targets, and newer players are also struggling. Rivian recently announced it will cut 10% of its workforce and expects to build about the same number of electric vehicles this year as it did in 2023. Lucid Motors plans to build about 9,000 vehicles this year, after once forecasting it would build 90,000. up to this point in time.
However, Fisker has always differentiated itself from other EV startups by pursuing an “asset-light” business model. He designed the Ocean but outsourced the construction to Magna Steyr in Austria. That decision has helped it get cars to market faster than some other startups, though it has put the company at risk in other ways. For example, his Ocean SUV is not eligible for the federal point-of-sale EV tax credit because the vehicle is not manufactured in North America.
Ultimately, Fisker said Thursday it sold just 5,000 Ocean SUVs in 2023 and generated $273 million in revenue after it began shipping in June. It lost just $761 million over the course of the year. Magna produced just over 10,000 Oceans, and Fisker said it hopes to start shipping them to its new dealers in order to generate short-term cash. The company declined to say on the conference call how many vehicles its initial partners have ordered or plan to order.
Like many other EV startups that went public by merging with a special purpose acquisition company, Fisker had a lot of problems as a public company. It had to delay the publication of its third-quarter 2023 financial results, in part because it found weaknesses in its internal financial reporting. At the time, two different chief accountants had also resigned.
Those problems continued Thursday, as Fisker said it would be late reporting its full financial results for 2023. It also revealed it had discovered another significant weakness related to its “revenue and related balance sheet accounts.” As a result, it framed the financial figures it released Thursday as “preliminary,” going so far as to add an asterisk to the press release’s title.
