Is Fisker going under? (Update)

Dark clouds seem to be accumulating above Fisker’s future. Magna, the company contracted to build the Fisker Ocean in Austria, says in its Q1 2024 financial report that it assumes no more will be built.

Fisker has been looking for opportunities to save itself for a while already. Now, the company hired to build its Ocean crossover is the next not to seem optimistic about its prospects.

During a recent earnings call, CEO Swami Kotagiri revealed that Magna had to adjust its outlook for 2024 after “assuming no additional Fisker Ocean production and lower sales on program delays and mix”.

Kotagiri, quoted by Yahoo Finance, added that “production of the vehicle is currently idled. Our current outlook assumes no further production. Consistent with disclosure we provided in our annual information form, this assumption reduces our 2024 sales by about $400 million and impacts our adjusted EBIT margin by about 25 basis points.”

Magna Steyr will lay off 500 employees at its contract manufacturing operation in Graz, Austria, as production of key models, including the Fisker Ocean electric SUV, BMW 5 Series, and Jaguar E-Pace and I-Pace, is halted or comes to an end this year.

Production of the BMW Z4 and Toyota Supra models, which share a platform, will end in 2026. The output of the combustion-powered Mercedes G-Class will continue and will be joined later by an electric variant.

Magna Steyr has the capacity to build 150,000 cars per year. In the final quarter of 2023,  it built 21,400 vehicles compared with 28,600 in the same period in 2022.

“The next three years will be very difficult in Graz,” Magna Steyr CEO Roland Prettner told the Kleine Zeitung newspaper. After that, Magna Steyr will have more orders again, he said. Magna is also hoping to get orders from Chinese manufacturers as they are looking for European sites to build their products and be safe for possible EU import restrictions of Chinese products.

10,000 Oceans built, almost half are still for sale

At the end of 2023, Fisker announced that over 10,000 Oceans had been built, and a little under half had been delivered. By March 15, Fisker reported that another 1,000 had been manufactured, but the company had a stockpile of about 4,700 vehicles, most of which were built the year before.

In what was seen as an ultimate effort to stay alive, Fisker cut Ocean prices in March of this year, drastically lowering the price by $24,000 and making the most affordable cost $24,999 in the States.

However, after the price drop, its six-strong US dealer network only delivered about 200 units. The company also has 12 partner dealers in Europe, but it is unclear how many Oceans it has put on the market.

Fisker cut Ocean prices by as much as it did, leaving owners who paid the original full price feeling cheated, seriously affecting the company’s image and credibility. The New York Stock Exchange even de-listed Fisker stock after its shares had reached an “abnormally low” price.

Is its overtaking in view?

Things weren’t looking great for Fisker, but in late April, CEO Henrik Fisker said that there were still four companies interested in saving the ailing automaker. He didn’t say what companies were in talks with him.

Nissan is not one of them anymore: take-over talks with the Japanese automaker fell through. According to various reports, Nissan was most interested in Fisker’s Alaska pickup but backed out of the deal.

Was Ocean promising?

When the first reviewers tested the Fisker Ocean, opinions were mixed. Some argued that it needed a lot more work to become competitive, while others saw plenty of character and qualities in the Ocean and were not as quick to criticize it.

Despite the partly negative press it received, owners who took delivery of their Oceans mainly had nice things to say about it. But undoubtedly, they are all worried about Fisker’s future and what its bankruptcy could mean for them in the future, thinking about after-service and available spare parts.

It would indeed be a pity to lose a company like Fisker (again). Henrik Fisker has always been a gifted designer, but perhaps his managing skills weren’t of that highest level. The question now is where the money to survive has to come from.

Many car manufacturers are under stress now, and perhaps it’s not a good time to be ‘on the street’. However, Fisker had some excellent projects in the drawer, the innovative and very affordable Pear, for example. Isn’t there anyone who sees the opportunities?

The Fisker Pear was a promising product. Chinese giant Foxconn/Fisker would have produced it.

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