– Fisker Inc. (NYSE: FSR) (“Fisker”), driven by a mission to create the world’s most emotional and sustainable electric vehicles, today is providing an update on recent business activities.
Dealer Partner Model Update
On January 4, Fisker announced a change in its vehicle distribution strategy toward an
innovative Dealer Partnership model in North America and hybrid model in Europe that
will continue to include direct sales to consumers and dealer arrangements. Since this
announcement, Fisker has seen substantial interest from potential partner dealers across the United States, Canada, and Europe. The company is currently engaged with over 100 dealers. Enthusiasm has been driven by the fact that Fisker is the only American brand available to dealers that manufactures exclusively electric vehicles that have class leading features (for example, the Fisker Ocean has the longest range in its segment). Fisker is scheduled to host dealers at its headquarters in Manhattan Beach during the week of January 29. In addition, Chairman and CEO Henrik Fisker and several Fisker executives are scheduled to attend the National Automobile Dealers Association (NADA) show in early February to meet with prospective dealers and promote the company’s new dealership model. Fisker expects the first Oceans to be available in dealer showrooms in February.
Many of Fisker’s potential dealer partners already support multiple brands of vehicles,
have existing EV infrastructure and the ability to service vehicles. The company
anticipates that dealers will be able to purchase vehicles for their inventory shortly after
finalizing the partner agreements. Fisker believes this strategy is consistent with its assetlight business model and will allow the company to build a strong distribution network
capable of servicing its customers in a more cost-efficient way. Initial dealer agreements
will likely cover California, Illinois, New York, New Jersey, Massachusetts, Florida,Maryland, and Canada.
Anticipated Positive Impact to Cash Flow
Fisker expects that the Dealer Partnership model will enhance its ability to turn new
vehicles into cash by reducing the time vehicles are retained on its balance sheet. Similar
to the traditional automotive OEM/dealer model, Fisker will recognize revenue when a
vehicle is sold to a dealer. Fisker anticipates that it will sell most of the vehicles it currently
has in inventory before the end of this year’s first quarter and expects to provide a
delivery update in February.
During the first half of 2024, the company expects to generate cash from the sale of
existing 2023 production vehicle as well as a consumption of raw materials, including
batteries, in producing cars in first half of 2024 that are currently on its balance sheet.
The carrying value of completed vehicles in Fisker’s inventory at the end of 2023 was
approximately $290 million. Since Fisker has been selling vehicles through its direct to
customer model and will pivot to a dealership model during Q1. We expect to sell the
balance of our 2023 vehicle inventory before end of the quarter, releasing almost $290
million on the balance sheet that can be used for working capital. In addition, Fisker has
approximately $260 million of parts, including batteries, which will support the
production of Ocean vehicles in 2024. As a result, Fisker expects to achieve a higher
contribution to cash flow from Oceans produced and sold in early 2024.
Amendment to 2025 Convertible Notes
As previously announced, on January 21, Fisker entered into a second amendment and
waiver agreement with the holder of its 2025 senior convertible notes. Pursuant to this
waiver, among other items, the company no longer is required to maintain a minimum
cash balance. In addition, the company has obtained a release from the investor of
certain intellectual property belonging to Fisker upon the company entering into certain
commercial agreements with an automotive original equipment manufacturer (OEM).
Fisker believes this waiver provides increased flexibility to pursue strategic
collaborations. Reflecting a series of conversions by the senior convertible notes holder,
the company’s overall debt level has been reduced. As of January 19, 2024, the principal
balance outstanding on the 2025 notes has been reduced by approximately $185.5
million to $324.5 million.
NHTSA Preliminary Evaluation
Fisker issued the following statement on the National Highway Traffic Safety
Administration (NHTSA) Office of Defects Investigation’s (ODI) Preliminary Evaluation of
reported braking issues with the 2023 Fisker Ocean:
The Fisker Ocean brake system uses both friction braking and regenerative braking. In
December 2023, Fisker responded to customer feedback and issued an Over-the-Air
update (Version 1.10) to the regenerative system that improved the customer experience
when traveling over bumps and uneven surfaces, resolving the issue. The Fisker Ocean
brake system meets or exceeds all US and international performance requirements.
Key Executive Leadership Updates
As previously announced, Fisker has strengthened its leadership team with the addition
of seasoned and experienced executives across departments including finance,
accounting, marketing, and sales.
These leaders include Angel Salinas as Chief Accounting Officer; Eric Goldstein as Head
of Investor Relations; Beverly Lively as VP, Internal Controls & Audit; and Dan Quirk as EVP,
of Finance and Accounting. Wolfgang Hoffman has also joined as Country Manager for Canada as well as Amira Aly as VP, Marketing, Sales & Financial Service US. Fisker also held the largest meetup in company history, with approximately 2,500 owners and prospective owners gathering in 24 US locations and at six locations in Europe.
About Fisker Inc.
California-based Fisker Inc. is revolutionizing the automotive industry by designing and
developing individual mobility in alignment with nature. Passionately driven by a vision of
a clean future for all, the company is on a mission to create the world’s most sustainable
and emotional electric vehicles.
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