Business
Fisker Hanging By A Thread Amid Financial Woes And Dreadful Q4 Result
Henrik Fisker’s electric vehicle company, once hailed as a potential Tesla rival, is hanging by a thread. The California-based startup recently warned investors it may go broke within a year, a stunning reversal of fortune that sent its stock tumbling. But Fisker remains defiant, claiming it has a turnaround plan—and it all hinges on securing a lifeline in the form of new funds or a lifeline from a desperate automaker.
The primary source of its troubles is money, or the lack thereof. Fisker burned through a substantial amount of cash in 2023, and it doesn’t have enough left to operate for another 12 months. To survive, the company is aggressively raising new funds, but success is far from guaranteed.
Making things even more complicated is Fisker’s struggling transition to a dealer-based sales model. This expensive switch, which involves partnering with traditional car dealerships, has already resulted in layoffs. But the company believes this investment will help them sell more cars, which is crucial for survival at this point.
Against this backdrop, development plans for future models have been drastically curtailed. Once boasting a lineup of planned electric vehicles, Fisker is now ruthlessly prioritizing the Alaska pickup truck. The compact, affordable Pear EV remains on the back burner as the company focuses on its last shot at redemption.
Fisker’s fate could ultimately depend on striking a deal with a cash-rich automaker. The company is currently in talks with a large, unnamed manufacturer, which could lead to a joint venture or cash infusion. While these negotiations offer a glimmer of hope, a deal is far from certain.
What a different story we heard last December—Fisker’s “spectacular” sales growth seemed to suggest a bright future for the daring startup. But today’s grim financial reality paints a vastly different picture. Despite delivering thousands of Fisker Ocean SUVs in Q4, the company is now haemorrhaging cash at an alarming speed that wasn’t evident with just sales figures alone. This stark reversal of fortune highlights the perilous nature of the EV business. Even seemingly successful sales numbers can mask deeper financial woes, making the sustainability of these ventures precarious.
