We crunched the numbers to figure out how Fisker will ramp production of the Fisker Ocean with its manufacturing partner Magna Steyr.
Today, Henrik Fisker announced his company, together with manufacturing partner Magna Steyr, plans to build 23 Fisker Ocean electric SUVs next week. That would be close to 25% of the entire total of Fisker Oceans built to date in one week or a run rate of nearly 100 vehicles/month. In a post to social media, the Chairman & CEO said, “The manufacturing MACHINE is running! Next week we are planning to built 23 cars in ONE week! Start of production November 17, 2022.”
Given Henrik’s post today, this got us thinking about Fisker’s 2023 production plans and the rate at which its partner can ramp production each month. Basically, how fast can Magna ramp Fisker Ocean production for Fisker? If you recall, last month Henrik Fisker stated, “Next year we have said we’re going to produce between 40,000 to 50,000 vehicles. That, I think it’s very reasonable and conservative.”
Furthermore, during the Q4 2021 earnings call, Henrik said, “So with Magna, we laid out I think a very conservative plan originally about 5,000 per month. However of course, Magna is an experienced contract manufacturer. And we are going into I believe the biggest hole that they have in the plant. Super modern, modern equipment, and it would allow us to next year easily get over 7,500 units per month in the second half, if we have the demand.”
Strong Demand for Fisker Ocean
If you’ve been following along, Fisker has the demand. The company reported last week it now has over 60,000 Fisker Ocean reservations. Don’t forget this number includes 5,000 pre-orders for the Fisker Ocean One throughout nine launch markets, each backed by a $5,000 non-refundable deposit. Also, it includes pre-orders for the US allocation of Fisker Oceans the company took back in August. On top of that, we continue to see a healthy use of our Fisker Ocean referral code (DDK87H) each month. Demand is strong.
Ramping Fisker Ocean Production
Now, let’s work backwards since we know more about Fisker and Magna production than we did at the beginning of the year. If Fisker produces 40,000 to 50,000 vehicles next year in 2023 the company will need to slowly ramp Fisker Ocean production, but at what monthly growth rate? We believe Fisker and Magna will achieve a 50% production rate month-over-month until the they produce 7,500 units/month (pictured above).
You’re probably wondering how we figured it out. Simple. Putting two and two together, our estimates show Fisker would reach monthly production of 7,500 Fisker Oceans at Magna in August 2023. This is inline with Fisker’s statement of hitting “7,500 units per month in the second half” of 2023. Official start of production for the Fisker Ocean begins in November. During the first month of production, we believe Fisker will build 200 units of the electric SUV. Then, Fisker and Magna will grow production at a rate of 50% each month.
Production picks up pace in Q3 2023
At a 50% monthly growth rate, Fisker and its manufacturing partner would be able to achieve 50,000 units by the end of 2023. That would be consistent with everything we’ve read and heard from Henrik Fisker and the company. In fact, Fisker’s FAQ even states, “We expect most deliveries [of Fisker Ocean One] to be completed in the first half of 2023.”
For example, in the table below, ramping production starts slow and picks up pace into the second half of 2023. When Fisker reaches full capacity in August 2023, the company would be producing 1,875 Fisker Oceans per week. That’s a stark contrast from 23 units its planning to produce next week, even before the official start of production.
| Month | Monthly Production |
|---|---|
| November 2022 | 200 |
| December 2022 | 300 |
| January 2023 | 450 |
| February 2023 | 675 |
| March 2023 | 1,013 |
| April 2023 | 1,519 |
| May 2023 | 2,278 |
| June 2023 | 3,417 |
| July 2023 | 5,126 |
| August 2023 | 7,500 |
| September 2023 | 7,500 |
| October 2023 | 7,500 |
| November 2023 | 7,500 |
| December 2023 | 7,500 |
| Total Units Produced | 52,477 |
It’s a process that’s already begun
In conclusion, ramping manufacturing takes time including Fisker Ocean production. Very few companies go from zero to 100 on day-one. Manufacturing is a process that is improved and optimized over time, especially when building a new product. Magna brings the manufacturing expertise Fisker needs to meet customer demand for the Fisker Ocean. The good news is Fisker and Magna have begun this process over a year ago. Electric SUVs are already rolling off the high volume assembly line. That said, let us know what you think in the comments below. Do you think Fisker and Magna will achieve this monthly rate of production growth?
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I believe that they can achieve this goal. My utmost concern is potential supply chain issues and a looming recession with very high interest rates (even for new cars). If Fisker can offer attractive interest rates for their auto loans, then I think this will make a big difference. I’m fearful that many reservations could be canceled simply due to a drastic change in economic conditions we are facing and upcoming fed tightening. I hope I’m 100% wrong.
Yes, you bring up some good points. The macro environment is putting pressure on virtually all companies in some way. Fisker isn’t immune to these pressures. However, the company appears to be navigating some of them well like supply chain. Also, one silver lining for Fisker among the economic issues is foreign exchange. The Euro is trading at $0.9985 to the dollar as of today, which should help with paying for Ocean production in Europe.
Many people will not see the Ocean they plunked $5000 on until 2024.