Since the end of last month, the first units of the new electric SUV Fisker Ocean have been coming of the line in the Magna-Steyr factory in Austria. This is a perfect moment to ask CEO and owner Henrik Fisker about his views on the car business and its recent evolutions.
Henrik Fisker is Danish and started his career as a car designer. He designed, for example, the beautiful Z8 for BMW and the DB9 and V8 Vantage for Aston Martin.
In 2007, he did initial design work on the Tesla Model S, but then he started his own car company Fisker Automotive, which produced the impressive but not flawless Fisker Karma. The company got into difficulties in 2013 and was sold to Chinese investors.
“Apparently, we were too early with the Fisker Karma. We were one year earlier than the Tesla Model S. Customers bought the car, but they didn’t plug it in. And nobody cared about the vegan interior or other things. Well, it was a good lesson, and it brought us a lot of experience and confidence about where we are today. Of course, there are new people and new ideas, and although there are a few of the original people with us, these are different times now: electrification is coming for sure, and there is no road back.”
“We see a much more mature supplier infrastructure, and at that time, we really didn’t have suppliers for EVs. There were two battery companies, Panasonic (supplying to Tesla) and LG Chem (at that time exclusive for GM with the Volt). We went with a start-up company, which is very risky, and it was detrimental for us. They went out of business right at the moment we had the car on the market for nine months. But, if you look at the first months after the launch, we were the second most sold luxury car in the Netherlands. We outsold Maserati in Europe, so it did well in the beginning, but we couldn’t continue.”
In 2016, a new chapter starts with the new company, Fisker Inc. Henrik Fisker has big plans involving several models coming within the next years, but the first one, the Ocean, a completely electric SUV, is in its starting blocks.
In Europe, Fisker wants to start the Ocean in countries that are the most EV-friendly?
“Yes, of course. The highest sellers are Scandinavia as a whole, Germany, and Austria (because the car is produced there, of course), but right after we’ll go into the rest, like Switzerland and France, and in the middle of 2023, we will go into the UK because it’s right-hand drive.”
At the world premiere of the car in LA in 2021, you said you would concentrate on production. Does this mean you count on other partners for distribution and service?
“We have a mixed strategy. Basically, we pick up your car, and we don’t want you to go to another third party. We have a few agreements with companies that can do our services, but we will also have our centers of excellence, at least one in each country, where we bring the vehicle if it’s close by or when something special is needed.”
“There will also be mobile Fisker technicians, and if they can manage the issue, whatever it might be, we prefer using those. That way, the vehicle can be serviced when you’re at home or at your work. All these are done with the idea of keeping the overall cost low, so we can have a lower sales price for the customer. At the end of the day, the more buildings you have, the more infrastructure you erect. It will all have to be paid for by the customer.”
Are you also thinking about a subscription model, the way Lynk&Co does it in Europe?
“We have a very unique subscription model, which we call Flexi-Lease, where basically you’re able to lease the vehicle and give it back anytime, and you also have a very high allowed km amount (30 000 miles or 45 000 km per year), so you don’t have to worry about that or about giving it back.”
“We’ll take it back and Flexi-Lease it to someone else after it has been checked. The idea is to try to get younger people into the vehicle that don’t want to commit to 40-50 000 euros and/or don’t want to commit to a three-year lease.”
“Short-term leases are very expensive per month. We will try to keep the monthly lease amount low. Customers will also be able to choose from additional options throughout the year. You won’t be forced to buy everything right away. So, we’re trying a whole new model, and we will talk about all the details probably next year once we really rolled it out.”
After Ocean, there will be PEAR. Foxconn is the partner. Is that because you want a non-expensive car?
“No, the reason is more about changing the way we think about a car. Internally, we call it a personal mobility device. I told our human experience team (with human interface and everything else) to look at what younger people are actually doing in the megacities around the world (London, Paris, Los Angeles, New York), create scenarios, and what their daily life looks like. Do they want a personal mobility device but not as a car-sharing model? What does that vehicle need to do for them? What are their needs? So, to follow that up, we need to think about cars in a different way.”
“I talked to the big boss of Foxconn and asked him how they were going to the supply chain in automotive and electrification, and he talked about the electronics industry. He talked about your smartphone as your freedom device, etc., and I asked him to do something together and innovate and come up with some new ideas.”
“Let’s think about how we manufacture the car, how we source the car. Will it come from this technology supply chain? And will it become a sort of technology device? Foxconn has also the ability to manufacture globally. In the US, they bought a giant factory where you can easily produce half a million vehicles per year, and we eventually will come to Europe to produce it, China as well, of course, but maybe also India.”
“The idea is this global mobility device that really has features that you’ve never seen in a car before. We’ve already signed off the concept design and the exterior and interior styling, and we are now in the second phase of engineering. It is scheduled to start production in 2024 and deliveries in that same year. It will be priced much below the Ocean, so its cost is important. How do we take the cost out of the vehicle? How to reduce things in a clever way?”
And for the next level, so to say, you’re going in a completely different direction with really expensive cars?
“You know, at the end of the day, I have a passion for cars, automobiles, I love design, etc. We must ask ourselves how we are going to move this passion that exists in the sport and luxury car segments, this passion for driving. How are we going to translate that into that segment? That might be the hardest segment to translate.”
“When you drive a normal car today of let’s say, 30 to 40 000 euros, it’s not exactly an amazing sounding engine, it’s normally a four-cylinder, pretty boring, and in the end, this is not the ultimate passion object. If you drive Ferrari, Lamborghini, or Aston Martin, for example, the motor sound is important, apart from the radical proportions of the vehicle. I’m working on how to get that passion back if the noise is gone, the gearshift is gone. The design will be increasingly important, no matter what price range we’re talking about. Technology will be important, but you also have to think about the type of vehicle.”
“Is the future sports car a tiny two-seater with that sort of mid-engined look? The reason for that look until now is that one had to put that giant engine somewhere, and you just put the two passengers in front of it. But now that we don’t have this big lump of an engine anymore, do we still need that look? Is that the car people still see as their ultimate luxury sports car? I’m thinking maybe not!”
Our vehicle will be a type of vehicle that does not exist today, not in any segment and specifically not in the sports car luxury segment. So, I’m very excited about the vehicle. I hope we will be able to show it late next year and have it in production in late 2024 because our goal is to have four cars in production in 2025.”
You’re going to develop these last two cars in the UK. Why?
“We have all our designers here in the US, and then we’ve set up a unit in the UK that is led by an ex-Aston Martin engineering executive, which I still knew from the time I spent over there. Working on high-end sports cars is a very unique skill, and it takes a different mindset than making a high-volume car, so I’m trying to split these two mindsets inside the company.”
“From experience, I know that it can be very hard in a company if you got the same people working on very different projects. We will have some crossovers, mind you, but making a $30 000 car is very different from making a $200 000 car. This unique skill set is there also because all these F1 teams and the Formula E teams that are located in the area, the many suppliers are used to low volume because you also need a different type of suppliers. So, that’s why we decided to have this engineering center in the UK.”
Recently, you declared that new ideas, especially where EVs are concerned, come from start-ups. You don’t have faith in the ‘old’ traditional manufacturers?
“I think it’s pretty normal that the disruption in a very traditional industry usually has to come from the outside. It doesn’t mean that the inside can’t catch up, but that’s not always the case. We saw this with the mobile phone companies, some of them changed, and when the shake-up settled down, we saw traditional ones and new ones. I think you’re going to see the same effect in the car industry.”
“A lot of the important market change will take place over the next couple of years, I think, maybe two, three or four years, and by 2030 we will see a very different landscape of who are the volume leaders in the world and are able to make the cars that people want. I don’t think it’s going to look like anything that is today. I think there will be some big surprises that nobody could have predicted, and I don’t want to predict them either, but for sure, not everybody will make it, and have the same market share as they have today. There are too many newcomers coming in, and those newcomers must take market share from somebody. It happens already, and the most prominent is, of course, Tesla. And if they announce that they want to make 20 million vehicles, some will have to lose; that’s obvious. There will be a very different market divide, and the consumer, of course, is going to be the one who decides what he wants and what appeals to him/her.”
“We did a survey on our customers, and 70% of our reservation holders (which are over 65 000 for the Ocean) never had an EV. They’re coming from car companies where they drive a traditional car. We tried to seek a clear pattern, but there wasn’t any. Our customers come from everywhere, from every car company almost. So, when consumers are ready to drive an EV, they may also be ready to change the brand.”
“They see that it’s a different technology that might demand different skills. So, when I’m used to going to Burger King and eating burgers there when I want to eat pizza, I know they have them at Burger King, but I might be interested in going to an Italian restaurant because they may know how to make that pizza much better. That’s why you see the growth of independent EV companies all over the globe, specifically in the US and China.”
Isn’t it obvious that total sales volumes will shrink as people have other mobility choices?
“It could be. There’s always room for growth, specifically in developing countries, but you’re right. When we look, for example, at Europe and the US, probably, we may not see such strong growth anymore in individual mobility. The fight will even be tougher in those segments. The difficulty, in my view, in these shared mobilities, whether it’s ride-hailing or shared mobility, is that there is going to be a demand from those who run those kinds of services for different kinds of vehicles, more aligned with exactly those services.”
“So far, we have used the same type of vehicle for individual use, taxis, ridesharing, car-sharing, and delivery. I think that it will be interesting to see who is going to attack those markets, we are again seeing new start-ups coming with solutions for those types of markets, and we see it less from the traditional manufacturers.”
“Although I personally believe that the individual mobility choice will always be prominent because it’s a comfort that is unparalleled, you can not compare it to anything else. Even if you have your ride-hailing car coming, somebody was just sitting in that car before, somebody might have left a smell, somebody might have left a stain, or maybe it’s not the color you like.”
So the point is personal mobility and ownership. Even if it’s a flexible lease, it’s yours. You chose the color, it’s your car, and the coffee stain is made by yourself. The slight smell of yesterday’s burger was your burger, not somebody else’s. And if you want to sing along, you sing along; whatever you want to do in that vehicle, you can do it because it’s your vehicle.”
“Because of that, even younger persons, who are shying away from purchasing a vehicle early, they might at one point in their life still want this private mobility.”
“Older generations were used to sacrifices for having a car because it was their freedom. We would sacrifice to have to take it to service every x month, to have all the annoyances of having parking tickets, etc. The younger generation doesn’t want to sacrifice on that. They’re not interested in going to a dealership to take the car to service; they don’t want to pay for parking tickets, so we have to find a new way of giving them mobility where we take these annoyances out. A lot of that can be done with technology. Fortunately, so we don’t need to have all these annoyances of having access to private mobility.”
Elon Musk told us once that he wasn’t interested in selling cars. He wanted everybody to be in an electric car made by his company or another one. They say the same thing about you…
“Yeah, that’s correct. You know, I love cars so much that I can’t imagine a world without private mobility or the automobile in particular. But I also know that if we don’t change this industry, then the politicians will forbid us from driving cars, and it will become very annoying owning a car. So, I want to be part of this revolution where we can all live with our vehicles in harmony with nature. One step is going electric, and the next step is creating vehicles in a much more sustainable manner. And that’s why it was important for us to go to Magna with their carbon-neutral factory.”
“It was important for us to go to the suppliers and ask them to have a clear vision of how to create sustainable materials. Some of them can create it now, and some cannot, but we work with every supplier and give them a brief: if you want to be a supplier of Fisker in the future, you have to work toward more sustainable products.”
“I think private mobility will not be an issue once we get there. Then there is one thing we got to solve, and that’s congestion. We want high-tech vehicles on the road with a lot of connectivity, and then we can start managing traffic congestion. The number one goal is to reduce pollution. That, in fact, is my ultimate passion, but we got to do it with exciting, cool cars. Nobody wants to drive a bad-looking electric car, just like nobody wants to eat a healthy meal that tastes bad.”