In a recent business update, Fisker, the renowned California-based EV startup, announced a reduction in its annual production guidance for the fourth time. This decision was made with the aim of freeing up $300 million in working capital.
Key Takeaway
Fisker, the EV startup, has once again scaled back its production targets, aiming to produce around 10,000 vehicles this year. This reduction is part of a strategy to unlock $300 million in working capital and enhance the company’s flexibility. Despite the adjustments, Fisker remains optimistic about its performance and expects to surpass other Western EV startups, delivering more customer cars in its first year of operations. The company is also implementing a new strategy to improve deliveries and expanding its service offerings to meet the growing demand for the Fisker Ocean.
Production Cut and Revised Targets
Fisker now expects to manufacture approximately 10,000 vehicles this year, marking a significant decrease from their previous production target. Just a month ago, Fisker had revised their projections to produce between 13,000 and 17,000 vehicles by 2023. This most recent cut reflects a drastic reduction from the company’s optimistic forecast made last year, where they anticipated producing 42,400 Ocean SUVs by the end of 2023 due to strong demand in the U.S. and Europe. Since then, Fisker has had to revise its estimates multiple times, lowering the projections to 32,000-36,000 vehicles in May and then to 20,000-23,000 vehicles in August. This latest decision marks the fourth reduction in production targets since the spring season.
Unlocking Working Capital
The decision to reduce production targets will enable Fisker to access $300 million in working capital, creating much-needed flexibility for the company. With this capital infusion, Fisker aims to strengthen its operations and continue its growth trajectory in an evolving market.
Improvements in Deliveries and Expansion
Fisker shared in their business update that they have launched a new strategy to overcome early logistics challenges and improve deliveries in the U.S. and Europe. While specific details were not provided, it appears that the strategy involves collaborating with additional transportation logistics companies to expedite deliveries, strengthening communication with reservation holders, and expanding their facilities dedicated to retail, deliveries, and service.
Leasing Program and New Hires
The company also revealed plans to launch a leasing program in the U.S., Canada, and Europe, although no timeline was specified for its implementation. Furthermore, Fisker introduced key additions to its leadership team, such as Dan Quirk as the new Executive Vice President of Finance and Accounting, Axel Buhr as the Vice President of Finance and Controller Operations, Ram Iyer as the Senior VP of EE Integration and Validation, and Wolfgang Hoffmann as Country Manager in Canada. These hires reflect Fisker’s commitment to bolstering its financial expertise and expanding its global presence.
Fisker remains determined to adapt to market conditions, optimize its operations, and strengthen its position in the competitive EV sector. By revising their production targets, unlocking working capital, and implementing strategic improvements, Fisker aims to navigate challenges, accelerate sales, and further cement their status as a major player in the industry.+
