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.
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