By Akash Sriram | REUTERS
Cash-strapped Fisker’s shares skid nearly 47% on Friday after the electric vehicle startup flagged going-concern risks, job cuts and a pause in investments into future projects until it secures a partnership with a manufacturer.
The company warned of a “difficult year” ahead, the latest sign of growing pain in the EV sector after weak production forecasts from Rivian and Lucid.
Fisker, whose shares hit a record low at 38 cents, has also received a notice from the New York Stock Exchange over non-compliance with a listing rule.
High interest rates, range anxiety while driving and high repair costs are making consumers rethink EV purchases and instead opt for hybrids.
Fisker expects to make between 20,000 and 22,000 Ocean vehicles in 2024, below estimates of 35,600, according to Visible Alpha.
“The company’s decision to cut 15% of its staff knocks its credentials as a growth stock and its warnings about its ability to operate as a going concern is understandably sending investors running for cover,” said Russ Mould, investments director at AJ Bell.
Fisker lacks the scale to compete effectively given high interest rates, Mould added.
The company ended 2023 with cash and cash equivalents of $325.5 million, down from $527.4 million as of Sept. 30, after its net loss more than doubled in the fourth quarter to $462.6 million.
Fisker also said current resources were “insufficient” to cover the next 12 months, despite a “higher-than-usual” cash injection in the first half of 2024 from late deliveries of its Ocean SUVs.
The company is trying to pivot to a dealer-partner model from the direct-to-customer model popular among EV peers.
CEO Henrik Fisker said the firm was not planning to start “external expenditure” on future projects – the Alaska pickup truck and PEAR compact car – unless it secures another manufacturing partner.
He added that Fisker was in talks with a large automaker for an investment, joint development of EV platforms or manufacturing in North America.
Editor’s Note: Reporting by Akash Sriram in Bengaluru; Editing by Devika Syamnath
