Shares of Fisker (FSR) are trading higher after a rough Friday morning. The company warned it would cut 15% of its workforce and miss its production target by 13,000 vehicles, amounting to losses of 37%. Part of Fisker's afternoon jump is thanks to a Reuters report, which detailed Nissan's (NSANY) possible investment of $400 million in the automaker's truck platform.
Fisker CEO Henrik Fisker joins Yahoo Finance to discuss the company's performance, including its layoffs and pivot toward a dealer model.
While Fisker could not comment on the reported deal with Nissan, though he did respond to questions regarding the automaker's talks with original equipment manufacturers (OEMs): "We started talking to several OEMs, I think over 6 months ago, so we obviously have done a lot of work already. So I hope a deal closes as soon as possible."
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- Fisker shares closing the day sharply lower, but they did claw back some losses on a report that Nissan is in talks with the company to invest more than $400 million in the business. That's according to a report from Reuters. The EV maker reporting weak results yesterday issuing a going concern warning and saying it will cut 15% of its workforce.
Fisker CEO Henrik Fisker is joining us now. Henrik, first of all, Thank you so much for joining us. Obviously you have a lot on your plate right now. So we really appreciate you taking the time.
I do want to start with that report from Reuters, because you talked about in your call and in your statement that you were in talks with an automaker. Reuters is saying that it is indeed Nissan. Can you confirm that and give us any details?
HENRIK FISKER: No, I cannot comment on that. And I don't want to comment on speculation. But we have said is we are in negotiation with an OEM for development of electric vehicles and US manufacturing as well as an investment.
- And so I guess then the question is, what are the next steps that you are taking? The next concrete steps you're taking to keep Fisker up and running?
HENRIK FISKER: Well, you know, what we are doing is we are pivoting into a dealer model, where we are able to reach many more customers around, not only the US but also Europe and that's going extremely well. We are signing up dealers almost every day at the moment.
We have a huge interest because we have-- I would say the only real competitor to the Tesla Model Y, which is the best selling EV in the world. And we have a longer range than that vehicle. We have features you can't get in that vehicle. And we are as good, if not better priced.
So I think our dealers are really excited to finally get a competitor. To also get an EV from an independent EV maker, because so far, all the dealers have been sitting about 10 years looking over the fence to see how other EV makers, new EV makers are selling direct to consumer. So I think they're very excited to get our vehicle.
- I'm curious then, Henrik, and I understand you're not going to talk about the speculation regarding Nissan, but regarding any potential deal, would you be able to put a timeline on when a potential deal might be closing?
HENRIK FISKER: Well, we obviously-- we started talking to several OEMs I think over six months ago, so we obviously have done a lot of work already. So I hope this deal will close as soon as possible that we are working on. And I can't give an exact timeline at this point in time. But it's not like we started talking yesterday, so this is definitely something that with that potential OEM we expect to close as soon as possible.
- You all are targeting production of 20,000 to 22,000 vehicles of those Fisker Ocean's this year. I believe the fourth quarter production was just under 4,800. Can you give us any kind of update on what your first quarter has looked like thus far in terms of production?
HENRIK FISKER: So we don't have production issues like many other startups because we have a contract manufacturer-- Magna Steyr and they are able to produce if we want 50,000 or 70,000 vehicles. So what we are right now going out with is a forecast of deliveries.
And if that forecast turns out or if it turns out, we can sell even more vehicles and we actually have some dealers-- actually were a little concerned that we have enough vehicles for them. And if that's the case that they can sell more vehicles, then we can raise production very easily. That's the advantage we have by having a contract manufacturing.
- I do also just want to talk about some other deals that are potentially on the table. Another deal we've heard about is with Foxconn. Are you able to talk about the status of that deal?
HENRIK FISKER: No. I mean, right now we are concentrating on our OEM deal. That's in the main focus. We are a small startup company, so we have to concentrate on one deal. That's very important for us. And we obviously are concentrating on what we think is the best deal for us long-term as a strategic deal.
- Henrik, and this is your second go round at a startup automaker. As you look over the past year or the past several years since you founded it, what happened this time that is brought you to this place? What in your view has been the biggest challenge?
I know last time there were some exogenous things. There was a hurricane for example. This time, what do you think has been the biggest obstacle to getting Fisker to move forward without getting to this sort of cash crunch position?
HENRIK FISKER: Well, first of all, I believe that we have a future. Otherwise, I wouldn't be here. And I believe we are going to manage to get out of this. I would say general EV slump that there is out there. We still see a huge amount of interest in our vehicle. And the EV market has been tough in the last couple of months.
But I think with our pivot to the dealer model, we are actually going to accelerate our sales more than we have. We did have a 250% sales growth from Q3 to Q4. And with the forecast we are doing right now, we are continuing to see a sales growth, despite the EV slump. And I think that's because we have such an amazing competitive vehicle that starts at $38,999.
- I know, Henrik, that the company said that the current capital may not be enough to sustain it over the next 12 months. There's potential challenge upcoming with the stock price and listing on the New York Stock Exchange. It really is sort of a make or break moment for the firm and you're at the helm.
So I'm curious about, what that's like as a leader? And how you're handling this kind of definitive moment for the company?
HENRIK FISKER: Well, I don't think it's a definitive moment. I think that this is based on obviously a concern going forward where you're projecting-- I think a certain scenario. I think what we're doing and what I'm doing is accelerating our dealer sign up. Basically, getting more and more dealers in quicker, which we are doing.
In fact, we're shipping vehicles to the first dealer today, actually. So we have done that incredibly fast. We announced this in January. So I've already 17 new dealer points amazing, and we expect to have 50 by the end of this quarter. So what we are doing is trying to generate more cash quicker. And the way we are doing that is by increasing sales.
And by the way, every car we are selling in the first half of this year is almost pure cash for us because we have already bought all the parts and paid for them. And we also have built cars that are in inventory ready to ship. So this is a pure cash generating for us, and that's something that if that would not be s case, that would be more difficult. But in light of that, I actually feel very optimistic about our future.
- We were just showing the share price. And Matty alluded to the idea that you might fall out of compliance with NYSE and might be delisted. Do you think you'll be able to get back in compliance in time to avoid that outcome?
HENRIK FISKER: Yes, I do believe. I do believe that. I mean, first of all, we have six months to do that. But I also believe that we have on the plate in terms of our dealer signs up, in terms of potential OEM strategic deal. All these things will happen way before we get to that point. So I'm very confident, and I believe that our share price will go up. In fact, I think they will do it already next month.
- Henrik, look forward to catching up with you as you continue this journey. Really appreciate again you taking the time.
