Fisker is laying off 15% of staff and says it needs more cash ahead of a ‘difficult year’

Picture Credit: Fisker

Electrical car startup Fisker is planning to put off 15% of its workforce and says it probably doesn’t have sufficient money available to outlive the following 12 months. The corporate says it’s looking for a method to increase that cash as it really works by means of a pivot from direct gross sales to a dealership mannequin.

“[W]e have put a plan in place to streamline the corporate as we put together for an additional troublesome yr,” founder and CEO Henrik Fisker mentioned in an announcement. Fisker reported greater than 1,300 workers as of the top of September 2023, which means the reduce may have an effect on near 200 individuals. The corporate’s share value plunged 35% in after-hours buying and selling.

Fisker mentioned Thursday that it completed 2023 with $396 million in money, although $70 million of that’s restricted. The corporate says it’s speaking with one in every of its lenders about making “an extra funding” within the firm. It additionally claims it’s “in negotiations with a big automaker for a possible transaction which may embody an funding in Fisker, joint growth of a number of electrical car platforms, and North America manufacturing.”

A partnership like that will likely be essential, as Fisker executives mentioned on a name Thursday that it received’t make investments any extra money in its future merchandise until it really works with one other automaker. Which means the fates of a pickup truck, compact EV and different fashions that Fisker has teased at the moment are in query.

The corporate’s monetary struggles come as it’s making an attempt to maneuver to a wholesale mannequin constructed round partnerships with sellers, a shift that Fisker says has “negatively impacted” its gross sales up to now. It’s at present sitting on stock of hundreds of autos which can be collectively value greater than $500 million. Fisker says it has acquired curiosity from round 250 dealerships however has solely signed up 13 so far.

Fisker has additionally been coping with various issues with its Ocean SUV, its solely mannequin up to now, as TechCrunch reported earlier this month. The corporate has mentioned it resolved some points with a software program replace in December and deliberate to repair many extra in a bigger 2.0 replace earlier this month, however that solely began making its method to buyer autos this week. It’s at present being investigated by the Nationwide Freeway Visitors Security Administration for experiences of sudden brake failure, in addition to for a handful of car rollaway incidents.

Plenty of massive automakers are pulling again on their aggressive EV targets, and newer gamers are having bother as effectively. Rivian just lately announced it was chopping 10% of its workforce and that it expects to make across the identical variety of EVs this yr because it did in 2023. Lucid Motors plans to construct round 9,000 autos this yr after once predicting it could be constructing 90,000 by this cut-off date.

Fisker has all the time differentiated itself from different EV startups, although, because it pursued an “asset gentle” enterprise mannequin. It designed the Ocean however outsourced the manufacturing to Magna Steyr in Austria. That call helped it get automobiles on the street quicker than another startups, although it has imperiled the corporate in different methods. As an example, its Ocean SUV isn’t eligible for the point-of-sale federal EV tax credit score as a result of the car isn’t manufactured in North America.

Finally, Fisker mentioned Thursday that it bought simply shy of 5,000 Ocean SUVs in 2023 and generated $273 million of income, after beginning shipments in earnest in June. It misplaced simply shy of $761 million throughout the complete yr. Magna produced simply over 10,000 Oceans, and Fisker mentioned it hopes to start out delivery these to its new supplier companions to be able to generate near-term money. The corporate declined to say on the convention name what number of autos its preliminary companions have ordered or plan to order.

Like many different EV startups that went public by merging with a particular function acquisition firm, Fisker has had quite a lot of rising pains as a public firm. It needed to delay the discharge of its third quarter 2023 monetary ends in half as a result of it discovered weaknesses in its inside monetary reporting. Round that point, it additionally had two completely different chief accounting officers resign.

These issues continued Thursday, as Fisker mentioned it is going to be late reporting its full 2023 monetary outcomes. It additionally revealed it has found one other materials weak spot associated to its “income and the associated stability sheet accounts.” Because of this, it couched the monetary figures it launched Thursday as “preliminary,” going as far as to append an asterisk to the headline of the press launch.