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Lay off 15%! A new force urgently seeks capital injection

2024-04-24 Update From: AutoBeta NAV: AutoBeta > News >


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On March 3, foreign media reported that American electric car startup Fisker (Fisk) was conducting emergency financing negotiations with Nissan.

Behind the emergency financing negotiations of Fisker is the lack of hematopoietic capacity, facing a shortage of funds. On Feb. 29, local time, Fisker said it planned to cut jobs by 15%, and said that without new sources of funding, the company's existing funds may not be enough to support growth over the next 12 months. Or Fisker's shares fell more than 37% in after-hours trading on the news of layoffs. At the time, Henryk Henrik Fisker, chief executive of Fisker, said the company was in talks with another "big carmaker" about financing, hoping to finalise the capital agreement "as soon as possible", but gave no details.

According to the latest financial report of Fisker, Fisker's total revenue in 2023 was $272.9 million, gross profit was negative $102.9 million, and full-year net loss was $761.9 million, or $2.22 per share. As of December 31, 2023, Fisker cash and equivalents stood at $325.5 million, well below the average analyst estimate of $502.3 million, and the book value of completed vehicles and raw materials in inventory was about $530 million.

According to the data, Fisker Automotive was founded in 2007 by Henrik Fisker. Henrik Fisker has considerable experience in the automotive industry, has worked in BMW, Ford and other car companies, BMW Z8, Aston Martin DB9 and V8 Vantage are all written by him, and then once participated in the pre-design of Tesla Model S. As a car designer, Henrik Fisker is undoubtedly successful, but for entrepreneurs, Henrik Fisker is hardly a success.

In 2007, Henrik Fisker founded the Fisker electric car company under his surname and launched the world's first electric luxury sports car, Karma. At the 2010 Shanghai Auto Show, the Fisker Karma announced its pre-price of 1.6 million yuan and went on sale in December 2011. the car is powered by a hybrid system of 2.0T gasoline engine and electric motor, with a maximum power of 402hp, a maximum torque of 1300N ·m and a fuel consumption of less than 2.4L for 100 kilometers, so it is regarded as a strong competitor to Tesla. But the high price also makes it difficult to develop in the domestic market.

Later, due to poor management, Fisker filed for bankruptcy protection with the US government in 2013 and went bankrupt in 2014, before being acquired by Wanxiang Group, a Chinese auto parts manufacturer, for $149.2 million, including the technical design rights of Fisker Karma and Fisker's production equipment in Delaware, but Henrik Fisker retained the trademark and brand name of Fisker. In 2016, Henrik Fisker regained its strength and announced the establishment of Fisker Inc. The new company will focus on the development and manufacture of pure electric vehicles with self-driving, beautiful and Internet-connected functions.

In July 2020, Fisker Inc completed $50 million in round C financing. In October 2020, Fisker Inc successfully landed on Nasdaq through a reverse takeover under the symbol FSR, and its share price rose 13% to $10.14 on the day of listing. But now it is facing delisting.

On Feb. 16, Fisker said it had received notice of non-compliance from the New York Stock Exchange because its share price closed below $1 a share for 30 consecutive trading days, and companies that did not comply with NYSE rules could be delisted, and the company would usually return to the minimum price requirement through reverse split. Fisker said the notice would not cause it to delist from the stock exchange immediately and would have six months to restore compliance.

As one of the "new car-building forces" in the United States, Fisker also hoped to enter the Chinese market. In October 2023, Fisker announced that it would open its first sales experience store in Shanghai, China, and began to promote its business layout in the Chinese market. According to the official website at that time, Fisker's first experience store in China will be located on Taicang Road, Huangpu District, Shanghai, and is expected to open in December 2023 or January 2024. China is a very important market and wants Fisker to be positioned as "one of the only two pure foreign electric car brands" in the Chinese market, Henrik Fisker said.

However, the industry is not optimistic about the expected performance of Fisker in the Chinese market. Slow delivery coupled with continued losses, it is clear that the current development of Fisker is not optimistic. At present, the domestic new energy vehicle market has entered the Red Sea stage, and the market competition is quite fierce, while the delivery of new cars in Fisker is far less than some second-tier new car-building forces in China.

Of course, Fisker's poor market performance is only a microcosm of many new American brands. On February 21st, Rivian announced in its fourth quarter 2023 results that Rivian would cut 10% of its workforce due to slowing demand for electric vehicles and lower costs. Lucid, which is also a new power brand in the United States, is also having a hard time. On Feb. 16, Lucid cut the price of its models by 1%, a drop of 10%. The industry believes that delivery continues to fall behind the price reduction. Data show that Lucid2023 delivered a total of 6001 vehicles a year, with revenue of $595.3 million and a loss of $2.8 billion.

So far, the Ocean is the only Fisker model on sale, with a price range of $37499 to $68999 (274000 to 504000 yuan). Data show that Fisker produced a total of 10142 new cars in 2023, but only 4929 new cars were delivered due to logistics restrictions. Fisker said it expects to sell all the nearly 5000 unsold vehicles produced last year by the end of the first quarter of this year. Deliveries of electric vehicles are expected to be between 20, 000 and 22000 this year, but without additional financing, the company may be forced to cut production, scale back operations and cut further jobs.

Fisker was once seen as Tesla's main rival, but now the gap between the two is very different. But Henrik Fisker once said bluntly: "We do not want to be a Tesla imitator, this is what other electric car companies or established car companies are doing, what we really want to do is an alternative product."

So far, Fisker has not been able to shake off losses. According to media reports, sources said that Nissan and the US electric car maker Fisker are in in-depth talks on cooperation, the deal may end this month, but has not yet been finalized. The terms of the deal could include Nissan investing more than $400m in the Fisker truck platform, building its own electric pickup truck on the Fisker platform, and including Nissan's production of Alaskan electric pickups for Fisker at Nissan's US plant from 2026.

Analysts point out that if Fisker succeeds in reaching a financing agreement with Nissan, it will provide the former with the necessary financial support and may accelerate cooperation in electric vehicle technology and market expansion.

It is difficult to predict whether the financing with Nissan will be successful. As of press time, it is not clear the specific matters of cooperation between the two sides.

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