Fisker could be headed for bankruptcy for the second time after leaders raised a going concern notice during its Q4 earning call Thursday afternoon, saying the company may not have enough cash to get through the year.
“We may need to seek additional equity or debt financing, and there can be no assurance that we will be successful in these efforts. If the financing is not available or if the terms of financing are less desirable than we are expecting, we may be forced to decrease our planned level of investment,” CFO Geeta Gupta-Fisker said.
Fisker delayed releasing its full financial earnings, but preliminary results showed it ended the year with $396 million in cash, but $70 million of that is restricted. While Q4’s $200 million revenue was nearly triple Q3’s, its net loss came in at $463 million.
To resolve its financial situation, the company has approached an existing shareholder for an additional investment. Executives also said they are negotiating with a large automaker for “an investment in Fisker, joint development of one or more electric vehicle platforms, and North America manufacturing.”
If it fails to win new investments, Fisker could be heading to bankruptcy for the second time. The company traces its origins to 2007 when it started work on the Karma plug-in hybrid that drew high-profile fans such as Justin Bieber (and to date things, he got his vehicle on Oprah Winfrey’s talk show).
In 2013, running out of cash to keep the startup going, it filed for Chapter 11 bankruptcy protection and was bought the following year by a Chinese automaker. Founder and CEO Henrik Fisker retained the brand names and logo, and restarted Fisker as a new company in 2016 to launch its EVs.
Along side the going concern, Fisker announced it would lay off 15% of its workers, close to 200 people. Fisker said the reduction was largely due to the recent shift to a dealer partner model, as opposed to the direct sales approach the company had previously taken.
Successfully pivoting to the dealership model could be crucial to Fisker’s overall survival, as Gupta-Fisker said their business plan is “highly dependent” on having dealer-partners. The company reportedly has over 250 expressions of interest so far and 17 signed up in Europe and North America.
CEO Henrik Fisker said the dealer selection process is focused on family-owned businesses that want multiple locations and expects there will soon be a wide reaching network.
“I expect we will keep signing up multiple dealers every week during the next few months and have a comprehensive dealer work with approximately 50 dealer locations at both North America and Europe by the second half of this year,” he said.
For now, the lack of funding means development will halt on the company’s other planned cars, such as the ALASKA pick-up and Pear compact SUV, until Fisker secures an OEM collaboration or investment. Currently, the Ocean SUV is the only Fisker EV the road, and it has reportedly endured multiple issues since its release, including buggy software, braking failures and sudden power loss.
In 2023, Fisker produced 10,193 Oceans through its partner Magna Steyr and delivered nearly 5,000. The company began the year with a forecast of 42,400 units but reduced the number twice. By November, executives were aiming for a minimum of 13,000 vehicles, but still came up short.
CEO Fisker attributed the production miss to supplier delays and “other issues” that “unexpectedly hampered” the company’s ability to ramp up both production and deliveries.
“While we made good progress in solidifying our delivery network, we were not able to efficiently accommodate our backlog of the pace we and our customers desired and deserved,” he said.
2024’s outlook included a “conservative” estimate of 20,000 to 22,000 deliveries. The company is currently working through the backlog of 2023’s vehicles and raw materials, which are worth a combined $530 million. Gupta-Fisker said the sale from those Oceans will result in a “higher than usual cash contribution” as they were already paid for. spending for SG&A, R&D, and CapEx for 2024 is expected to be in the range of $320 million to $390 million, with roughly $200 million dedicated to SG&A.
Shares of Fisker (Ticker: FSR) have tumbled 92% since September. The company reported earnings after the bell on Thursday, closing at $0.72 per share and opened at $0.42 per share on Friday morning. As of writing, shares are trading at $0.40 per share.
