Although EV sales are on the rise, companies whose survival rests on plug-in power aren’t faring much better. Struggling production, declining demand and high interest rates are pushing some of them off the map. The latest is Fisker, a California-based company with big ambitions but dwindling funding.
“Yes,” Fisker said. “grave suspicion” The company said in a filing with the Securities and Exchange Commission yesterday that it has enough cash to get through this year. So the company is cutting costs, laying off 15% of its workforce while seeking more investment. Fisker said it is “in discussions with existing bondholders regarding the possibility of making additional investments in the company.”
“We recognize that the industry is entering a turbulent and unpredictable period.”
“We recognize that the industry has entered a tumultuous and unpredictable period,” Fisker CEO Henrik Fisker said in a statement. “Understanding that and leveraging the lessons learned from 2023, we have made plans to streamline our company in preparation for another challenging year.”
The company has recently switched from a Tesla-like direct sales model to franchised dealerships, which it says is expected to reduce costs. Therefore, employees who were engaged in direct sales are most likely to be laid off. Fisker also said it would streamline its operations, including reducing its “physical footprint,” raising the possibility of closing offices and sales locations.
Despite these headwinds, Fisker said he still expects growth, especially if 2024 turns out to be a better year for EV sales than expected. “We are negotiating with major automakers for potential transactions that include an investment in Fisker, joint development of one or more electric vehicle platforms, and manufacturing in North America,” Fisker said in a statement.
Henrik Fisker has been preaching the gospel of affordable EVs for years. But the company’s asset-light business model, which relies on Austria’s Magna Steyr, a contract manufacturer for Mercedes-Benz and BMW, to build Fisker Ocean SUVs, has not yet taken off.
Despite these headwinds, Fisker said he still wants to grow.
Last year, a short seller released an explosive report alleging that Fisker’s current cash balance was tied to an undisclosed bank guarantee to Magna Steyr. It also claimed that Ocean’s platform is based on that of a Chinese crossover also made by a contract manufacturer. Mr. Fisker denied the allegations.
Additionally, quality issues remain. Some Ocean owners have complained that their EVs are losing power. We have also received complaints about key fobs breaking and the bonnet suddenly opening while driving. according to tech crunch. The company claims to have addressed most of these issues through software updates.
The landscape for pure EV companies has become even more challenging over the past year, with some customers proving reluctant to switch to fully electric vehicles due to sticker shock and unreliable charging networks. It has become. EV sales are still increasing, but at a slower pace than expected. On the other hand, the sales rate of hybrid vehicles is higher than that of battery EVs.
