Los Angeles, CA – Fisker, a California-based electric vehicle company, faced a wave of unsettling news as it revealed its Q4 earnings report yesterday. The report rattled investors and analysts on Wall Street, casting doubt on the company’s financial future.
Fisker disclosed that due to its current financial state, shifting dealership sales strategy, and the competitive electric vehicle (EV) market, there is “substantial doubt” about its ability to sustain operations as it prepares to file official financial statements for 2023. As part of its measures to navigate these challenges, the company announced a 15% reduction in its workforce.
Despite having $396 million in cash reserves at the end of the fourth quarter, with $70 million restricted, Fisker is actively engaged in discussions with an existing noteholder regarding additional investment and is in negotiations with a major automaker for a potential collaboration involving investment, joint EV platform development, and manufacturing in North America.
Reports emerged that Fisker is in preliminary discussions with Nissan for a $400 million cash infusion, a move that could grant Nissan access to Fisker’s upcoming truck platform. In an interview, Fisker’s CEO Henrik Fisker hinted at advanced talks with an automaker for EV development and US manufacturing, though he stopped short of confirming if the automaker in question was indeed Nissan.
Despite the hope of an infusion of cash and a strategic partnership with a well-established automaker, Fisker’s struggles persist. The company’s stock plummeted nearly 34% following the news, consistently trading below $1 since the beginning of the year.
Acknowledging the challenges, Fisker remains optimistic about its future prospects and sales growth, especially with a shift to a dealership model. The company cited a 250% increase in sales from Q3 to Q4 and anticipates sustained growth despite the recent challenges in the EV market.
Facing questions about its liquidity and compliance with NYSE rules as its stock struggles to stay above $1, Fisker pressed on with plans to collaborate with traditional dealerships and expand its sales network. However, doubts linger among investors, reflecting concerns about the company’s financial stability and short-term visibility.
Looking ahead, Fisker’s lone product, the Ocean EV, holds promise according to Citi analyst Itay Michaeli, but uncertainty looms over the company’s financial health and strategic partnerships. Michaeli downgraded the stock to Neutral/High Risk and adjusted the price target amid disappointing Q4 financial results, with revenue falling short of expectations and a substantial net loss reported.
As Fisker grapples with its financial challenges and seeks to secure a path forward through collaborations and sales initiatives, the company’s future remains uncertain amidst the evolving landscape of the electric vehicle market.