Asked about potential profitability this year as a pure EV startup, Henrik explains what makes Fisker different from other companies like Lucid and Rivian.
Henrik Fisker, the Chairman & CEO of Fisker, discussed the company’s performance on a recent Squawk on the Street interview with Phil LeBeau. He reiterated Fisker Ocean production guidance for 2023. Speaking on CNBC, Fisker said his company, a pure EV startup, is awaiting regulatory approval and will start delivering cars once that happens. Henrik said Fisker can ramp up production quickly thanks to its contract manufacturer and could be profitable as soon as it began shipping cars. This is what sets Fisker’s business model apart from Lucid, Rivian, and other EV startups.
For instance, the business model of Fisker involves a contract manufacturer that already produces cars at scale. Fisker’s production partner, Magna Steyr, can quickly ramp up production to deliver a large number of cars. Most other pure EV startups have built their own factories and have inefficiencies during ramping or downtime, the opposite of Fisker’s asset light approach. Fisker forecasted less spending than the capital it has, and its business model allows it to make money on the first cars it ships, with a guidance of 8 to 12% profitability. The Fisker CEO believes his company can be profitable this year and may even exceed their guidance.
According to Henrik Fisker, “One of the interesting things about our business model is we have a contract manufacturer that can ramp up really quickly. So once we pull the trigger on the ramp, we will be able to deliver a ton of cars quickly, which is really the difference I think on Fisker’s business model.” He also went on to say, “Most startups, they’re not making profit for two or three or four years, so the cash burn is much more dramatic. In our case, because of our business model, we are making money on the first cars we ship.”
The Road Less Travelled
Fisker isn’t the first company to ever deploy an asset-light strategy. However, an asset-light business model is unique for an EV car maker. Fisker has taken the road less travelled. It is following in the footsteps of other well-known consumer product companies, allowing them to focus on their core competencies. Fisker’s core competencies are design and customer experience. This strategy allows Fisker to work on multiple electric vehicle projects at the same time.
As of yesterday, Fisker confirmed they are publicly working on and building out the “Alaska” pick-up truck program. That rounds out Fisker’s EV line-up with the Ocean, PEAR, RŌNIN and Alaska — an electric SUV, compact, GT sports car, and pick-up truck. Partly made possible by not building factories from the start, rather deploying an asset light strategy. By leveraging partners with developed platforms, Fisker asset-light approach de-risks its business and differentiates it from other EV car makers.
Fisker Ocean Owner Meetups
Join fellow Fisker Ocean owners and enthusiasts at local meetups next month https://fiskerati.com/meetup/!
Premium Articles
Fiskerati Forums
Go to Fiskerati Forums to discuss the Fisker Ocean and follow various topics about this electric SUV.
Download Fiskerati App
Don't miss out on the latest Fisker updates — download the Fiskerati app today!
Contact Fiskerati
If you have any photos or tips to share, questions to ask, or if you're interested in partnering with us, please send an email to [email protected].
Stay Connected
Follow us on Twitter, Facebook, YouTube, and Google News.
Fiskerati Newsletter
Sign up for our free newsletter, This Week In Fisker, and receive updates directly in your email inbox!
You Might Like
As Henrik outlined… this strategy is vastly discounted by the markets. Additionally, he has partnered with companies that have a history of producing items that are highly desired in the marketplace and have a reputation for quality. If you haven’t purchased the stock, or have not averaged down from early purchases, this is your chance before the market catches up and the shorts start to cover.
I posted this question after a Ronin article. Probably better to ask here. I am a fairly new investor and have come to this site for information in recent months. I will post my question again — How do we have confidence in Foxconn to manufacture a high quality, reliable vehicle when they have little experience with automobiles and the Lordstown’s Endurance is already seeing troubling problems? I would sincerely welcome some thoughtful feedback and insight. Thank you.
Hey Tim, That’s a great question. Probably requires a longer explanation than in a comment. We will add this to the list of articles to write in the future. In the meantime, maybe we can mention it on an upcoming All-Things Fisker episode?
Hello Sean. I appreciate your reply. I look forward to more attention on this topic. Foxconn’s core competency has been the production of consumer electronics and smart phones – something people seem keen to replace every 18 months or so. An automobile is a different animal. We expect them to be high quality, reliable and durable, lasting many years, if not decades. With the increasing number of EV recalls as of late, and with Foxconn’s limited automobile experience, the issues of “quality-build” and vehicle durability are critical in my mind as Fisker embarks on this contracting model. Thank you.
Hey Tim, There was this press release from Foxconn about debuting three EVs some time ago. I would imagine they’ll get a lot of experience with Lordstown Motors and other customers before they fire up the PEAR production line. As we learn more, we will share.
Yes. I had read that press release some time ago. And now they are experiencing major issues with their Lordstown Endurance vehicles being recalled for very dangerous reasons. Again, thank you. I will look forward to much more attention being given to the quality and lasting durability of our Fisker automobiles.
I suspect there are a lot of people like Mr. Holton. Consumers have been looking for information about EV reliability and sustained quality and durability, but very little trustworthy information is out there. I too look forward to more clarity on this topic as it relates to Fisker and their Foxconn contract manufacturing strategy. The news lately from Lordstown has been quite disconcerting.
Thanks for your comment Annaka. Understood. As more info is released we will be sure to publish it.
I am a fan of the Ocean and the company’s stock. Yet, I still have not seen announcements from the US vendor confirming they are ready to provide maintenance/repair/warrantee service. This will be helpful to moderate some concern in the N. American market.
I have invested in the stock (multiple times) and will probably (not definitely) purchase the Ocean (made a deposit on the Extreme, not yet confirmed… see above). Evidence, that I am taking a leap on the “reliability, sustained quality, and durability” of the Ocean EV. I am doing this based on Magna’s past performance, and also their equity partnership with Fisker and the extra incentive to perform that this provides. I truly believe the continued Magna relationship is key element to the whole venture, for investors and consumers alike.
As Tim and Annaka noted, however, these other relationships need closer scrutiny. To date, I’ve viewed Lordstown as more separate from Fisker than I do Magna. It was noted somewhere (here?) that the Pear project will have a reasonable amount of engineering and parts overlap with the Ocean.(?) In essence, it appears, the Magna relationship will also provide benefits to the Pear project. It also appears that the Pear will be a crucial project for Foxconn. More so, perhaps, after the missteps alluded to.
I assumed, until taking a step back here-today, that Magna’s contribution could mitigate what we’re hearing about Lordstown’s current project. While hopeful my assumptions are correct, I’m open to and I respect the views expressed above. I look forward to continued reporting and comments about Lordstown/Foxconn and the Pear project.