Fisker lays off 15% of staff and says it needs more money ahead of a “difficult year”

Image credits: Fisker

Electric vehicle startup Fisker plans to lay off 15% of its workforce, saying it likely won’t have enough cash on hand to survive the next 12 months. The company says it is trying to find a way to raise that money while working through a shift from direct sales to a dealer model.

“[W]We have put a plan in place to streamline the business as we prepare for another difficult year,” said founder and CEO Henrik Fisker in a statement. Fisker reported more than 1,300 employees at the end of September 2023, meaning the cuts could affect nearly 200 people. The company’s stock price fell 35% in after-hours trading.

Fisker said Thursday it ended 2023 with $396 million in cash, although $70 million of that is restricted. The company says it is in discussions with one of its lenders about making “an additional investment” in the company. It also claims that it is “in negotiations with a major automaker regarding a potential transaction, which could include an investment in Fisker, co-development of one or more electric vehicle platforms and manufacturing in North America.”

Such a partnership will be critical as Fisker executives said on a call Thursday that it will no longer invest money in its future products unless it partners with another automaker. That means the fate of a pickup, a compact EV, and other models Fisker has teased are now in question.

The company’s financial troubles come as it tries to transition to a wholesale model built around dealer partnerships, a shift that Fisker says has had a “negative impact” on sales so far. It is currently on the inventory of thousands of vehicles collectively worth more than $500 million. Fisker says it has received interest from about 250 dealers, but only 13 have signed up so far.

Fisker has also faced a number of issues with its Ocean SUV, its only model to date, as TechCrunch reported earlier this month. The company has 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 working its way this week find customers’ vehicles. It is currently under investigation by the National Highway Traffic Safety Administration for reports of sudden brake failure, as well as a handful of vehicle rollover incidents.

Some major automakers are pulling back on their aggressive EV goals, and newer players are having problems as well. Rivian recently announced that it will cut its workforce by 10% and expects to produce about the same number of electric vehicles this year as it will in 2023. Lucid Motors plans to build about 9,000 vehicles this year, after once predicting that it there would be 90,000 by 2023. this time.

However, Fisker has always stood out from other EV startups because it pursued an “asset light” business model. It designed the Ocean, but outsourced production to Magna Steyr in Austria. That decision has gotten cars on the road faster than some other startups, though it has also put the company at risk in other ways. For example, the Ocean SUV is not eligible for the federal EV tax credit at the point of sale because the vehicle is not manufactured in North America.

Ultimately, Fisker said Thursday that it sold nearly 5,000 Ocean SUVs in 2023 and generated $273 million in revenue after beginning shipments in earnest in June. It only lost $761 million for the year. Magna produced just over 10,000 Oceans, and Fisker said it hopes to start shipping them to its new dealer partners to generate cash in the near term. The company declined to say how many vehicles its original partners have ordered or plan to order during the conference call.

Like many other EV startups that went public by merging with a special purpose acquisition company, Fisker has had many growing pains as a publicly traded company. The company had to postpone the release of its third-quarter 2023 financial results in part because it discovered deficiencies in its internal financial reporting. Around that time, two different Chief Accounting Officers also had to resign.

These problems continued on Thursday, as Fisker said it will be late in reporting full financial results for 2023. It also revealed that it has discovered another material weakness related to its “revenues and related balance sheet accounts.” . As a result, the company labeled the financials it released Thursday as “preliminary,” even going so far as to add an asterisk to the headline of the press release.

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