© Reuters. FILE PHOTO: Electric car company Fisker shows off its Alaska pickup truck in Huntington Beach, California, August 3, 2023. REUTERS/Mike Blake/File Photo
(Reuters) – Fisker (NYSE:) shares skid nearly 40% on Friday after the electric-vehicle startup flagged going-concern risks, saying it would cut its workforce by 15% and pause investments in future projects until it secures a partnership with a manufacturer.
The company warned of a “difficult year” ahead, the latest sign of growing pain in the EV sector after weak production forecasts from Rivian (NASDAQ:) and Lucid (NASDAQ:).
Fisker, whose shares were down 38.9% at 44 cents in premarket trading, has received a notice from the New York Stock Exchange that it was not in compliance with a listing rule.
High interest rates, range anxiety while driving and high repair costs are making consumers rethink EV purchases and instead opt for hybrids.
Fisker expects to make between 20,000 and 22,000 Ocean vehicles in 2024, below estimates of 35,600, according to Visible Alpha.
The company ended 2023 with cash and cash equivalents of $325.5 million, down from $527.4 million as of Sept. 30, after its net loss more than doubled in the fourth quarter to $463.6 million.
Fisker also said it needs more cash over the next 12 months, despite a “higher-than-usual” cash injection in the first half of 2024 from late deliveries of its Ocean SUVs, which were delayed due to logistics issues.
The company is trying to pivot to a dealer-partner model from a direct-to-customer model, in a shift from the strategy followed by EV peers.
“Fisker’s survival is likely contingent on its ability to execute a deal,” TD Cowen analyst Jeffrey Osborne said.
CEO Henrik Fisker said the company was not planning to start “external expenditure” on future projects, the Alaska pickup truck and PEAR compact car, unless it secures another manufacturing partner.
“Fisker is in negotiations with a large automaker for a potential transaction which could include an investment in Fisker, joint development of one or more electric vehicle platforms, and North America manufacturing,” he added.
(This story has been corrected to change the net loss figure to $463.6 million, from $462.6 million, in paragraph 6)
