Fisker is facing a critical financial challenge, as it has disclosed to investors the company may run out of cash within the next year. The company says it is actively seeking additional funding and exploring strategic partnerships to stay afloat.
The announcement came in the company’s Q4 earnings report this week, indicating a potential inability to meet its financial obligations over the next 12 months without securing further equity or debt financing. “To the extent Fisker’s current resources are insufficient to satisfy its requirements over the next 12 months, the company will need to seek additional equity or debt financing, and there can be no assurance that Fisker will be successful in these efforts,” the company stated.
In a statement, CEO Henrik Fisker said they are currently in negotiations with an unnamed automaker for additional funding and also as a development and manufacturing partner. “On the strategic front, Fisker is in negotiations with a large automaker for a potential transaction which could include an investment in Fisker, joint development of one or more electric vehicle platforms, and North America manufacturing.
The company is also contemplating cost-cutting measures, including laying off 15% of its workforce, as part of its broader strategy to reduce expenditures. However, these measures come with their own set of challenges and potential impacts on product development and operations. “If the financing is not available, or if the terms of financing are less desirable than Fisker expects, the company may be forced to decrease its planned level of investment in product development, scale back its operations including further headcount reductions, and reduce production of the Fisker Ocean,” the company elaborated. (via InsideEVs)
The future of Fisker’s product lineup, including the Alaska pickup and the Pear compact SUV, now hinges on the company’s ability to forge a partnership with another automaker. CEO Henrik Fisker expressed a strategic focus on the Alaska, viewing it as a critical element for the company’s potential growth and profitability. “We see that the biggest opportunity for growth and I think profitability, and getting speed to market is with the Alaska,” Fisker stated.
In an effort to streamline operations and possibly revive its financial prospects, Fisker has already announced it is shifting from a direct-sales model to a dealership model, handing off vehicle sales to car dealers. This transition is partly responsible for the workforce reduction, as the company aims to adapt its sales strategy to better suit its current reality.
Despite these setbacks, Fisker remains optimistic, planning to deliver 20,000-22,000 Ocean SUVs globally this year and working on strategic initiatives to overcome the obstacles faced in 2023.
