Fisker, a prominent electric vehicle (EV) startup, is planning to lay off 15% of its workforce as it faces financial struggles. The company has announced that it may not have enough cash on hand to survive the next 12 months.
Financial Challenges Ahead
In a statement, Henrik Fisker, founder and CEO of Fisker, acknowledged the difficulties the company is facing. "We have put a plan in place to streamline the company as we prepare for another difficult year," he said. The layoffs are part of this plan, which aims to reduce costs and improve efficiency.
The company’s financial situation has been deteriorating over the past few months. Fisker reported that it finished 2023 with $396 million in cash, but $70 million of that is restricted. This means that only $326 million is available for immediate use. The company is now trying to find ways to raise additional funds to stay afloat.
Struggling Sales and Manufacturing Issues
Fisker has been experiencing difficulties in selling its products. Despite starting shipments in earnest in June, the company sold just shy of 5,000 Ocean SUVs in 2023, generating $273 million in revenue. However, this was not enough to cover the costs of production and other expenses.
The company’s manufacturing issues are also a concern. Fisker has been outsourcing its production to Magna Steyr in Austria, which has led to several problems. The Ocean SUV is not eligible for the point-of-sale federal EV tax credit because it is not manufactured in North America.
Potential Partnership with Another Automaker
Fisker has announced that it is in negotiations with a large automaker for a potential partnership. This could include an investment in Fisker, joint development of one or more electric vehicle platforms, and North America manufacturing.
The company’s executives have emphasized the importance of this partnership. "We believe that partnering with another automaker will help us to improve our production efficiency and reduce costs," said Henrik Fisker.
Preliminary Financial Figures Released
As part of its efforts to raise funds, Fisker has released preliminary financial figures for 2023. However, the company has appended an asterisk to the headline of its press release due to some concerns about the accuracy of these numbers.
The preliminary figures show that Fisker’s revenue for 2023 was $273 million, down from $350 million in 2022. The company’s net loss for the year was $430 million, compared to a net loss of $220 million in 2022.
Layoffs and Restructuring
As part of its efforts to reduce costs and improve efficiency, Fisker is planning to lay off 15% of its workforce. The company has not disclosed which departments will be affected by these layoffs or how many jobs will be lost.
The restructuring plan also includes the closure of some facilities and the reduction of production capacity at others. This will help Fisker to reduce its costs and improve its financial situation.
Conclusion
Fisker’s financial struggles are a concern for the entire EV industry. The company’s difficulties in selling its products and manufacturing issues have led to significant losses. However, the potential partnership with another automaker could provide some relief.
