Fisker, the electric vehicle start-up, has exceeded expectations by producing 10,142 all-electric Ocean SUVs in 2023. This figure surpasses the revised forecast of 10,000 units that was given in December. However, it should be noted that throughout the year, the production estimates have continually decreased.
Initially, in May, management anticipated an output of 32,000 to 36,000 EVs for the year. By August, this range had been adjusted to 20,000 to 23,000 units, and in November, it was further reduced to 13,000 to 17,000 units. Despite these fluctuations, Fisker’s stock showed significant growth in early trading, rising approximately 20% to $1.81 per share. In contrast, the S&P 500 and Nasdaq Composite remained unchanged.
This positive performance not only reflects the company’s ability to surpass forecasts but also contributes to a rebound in stock value. Following the November guidance cut, Fisker’s shares had experienced a decline of over 60%. Additionally, the overall loss for the company in 2023 was close to 80%.
At the beginning of the year, Fisker had a market capitalization of around $3 billion. However, this figure has now fallen to approximately $600 million. Though challenges persist, Fisker’s recent achievements provide hope for a brighter future.
Fisker Faces Challenges in Production and Cash Flow
Fisker, a start-up in the auto industry, has been facing declining forecasts for production. However, this cannot be solely attributed to management’s shortcomings. The rise in interest rates has dampened investor enthusiasm, particularly for companies like Fisker that have yet to generate positive free cash flow.
By 2024, Fisker is expected to utilize approximately $250 million in cash to expand its business, following a significant expenditure of $700 million in 2023. The turning point is projected to occur in 2026 when deliveries are estimated to reach 84,000 units and positive free cash flow is anticipated.
For an automaker, this is a modest number in terms of producing positive free cash flow. However, Fisker’s advantage lies in not owning its manufacturing infrastructure, which helps to keep costs down.
The responsibility of assembling Fisker vehicles lies with Magna International, a seasoned car manufacturer that has served multiple automakers over generations. The Ocean, Fisker’s flagship model, is being built at Magna International’s assembly plant in Austria. This approach allows companies to produce vehicles in smaller volumes without the need to establish new assembly plants or extensively retool existing operations.
According to Fisker’s recent release, around 4,700 vehicles have already been delivered. This means that soon, the roads will see more Ocean SUVs. Currently, these deliveries are taking place in Canada, with the United States deliveries yet to begin.
Despite the challenges, Fisker remains optimistic about its future prospects and the potential to make its mark in the automotive industry.