Fisker's Struggles Raise Concerns as Electric Vehicle Demand Slows, Shares Plummet 27%

Fisker, a leading electric vehicle (EV) maker, has issued a warning about its future viability due to challenges in selling its flagship electric vehicle. The company's shares plummeted by 27% in extended trading following the announcement.

Financial Struggles and Workforce Reduction

The company's preliminary revenue for the fourth quarter was reported at $200.1 million, significantly lower than the average analyst estimate of $310.8 million. These financial difficulties have prompted Fisker to consider reducing its workforce by about 15% in an effort to streamline operations.

Impact on Industry

Fisker's announcement, along with weak production forecasts from other EV makers, including Rivian Automotive and Lucid, indicates a potential period of hardship for the industry. These challenges could potentially slow down the transition from traditional gasoline-powered vehicles to electric ones.

CEO Statement

Fisker CEO Henrik Fisker acknowledged the challenging year, citing delays with suppliers and other issues that hindered the timely delivery of the Ocean SUV. The company's net loss for the fourth quarter widened to $463.6 million from $170 million a year ago.

Expansion Plans and Financial Needs

In an effort to strengthen its market presence, Fisker plans to add dealerships alongside its direct-to-consumer distribution model. The company has already secured 13 dealer partners across the United States and Europe. However, Fisker recognizes that its current resources may not be adequate to meet its requirements over the next 12 months, and it is considering seeking additional equity or debt financing.