The asset-light approach allows Fisker to laser focus on design and customer experience and partner with others for the rest.
Fisker has a unique asset-light business model for a car maker. Following in the footsteps of Apple, it allows them to focus on their core competencies. Fisker’s core competencies are design and customer experience. The company is able to deploy their core capabilities and intellectual property in areas where it can gain a competitive advantage. See the chart below.
This strategy, together with capable partners, allows Fisker to work on multiple electric vehicle projects at the same time. Currently, the company is publicly working on the Fisker Ocean, PEAR, and RŌNIN. Fisker also has several other undisclosed projects in the works.
As noted in the investor presentation, Fisker’s partners allow them to drive scale, stay lean, de-risk, and move fast in areas where differentiation is not important. Fisker gets to focus on what they are good at. They partner with other companies for the rest (their non-core competencies). For instance, Fisker relies on strategic partners for contract manufacturing, lease financing, and public charging among others. All of this is part of the asset-light operating model.
|Design||Exterior; Interior; Flexible Platform Adaptive Design (Supports rapid, efficient product development)||Fisker (Internal)|
|Software||Create / Tune (PWT, E/Arch, Cockpit, ADAS, App)||Fisker (Internal)|
|User Interface||Revolutionary Design (Intuitive UI on state-of-the-art 17.1″ high-resolution display)||Fisker (Internal)|
|Connectivity||Full OTA Upgrade Capability (Supports post purchase revenue opportunities)||Fisker + Supply Chain|
|Powertrain||Advanced battery pack and drive unit; Proprietary BMS||Fisker + Supply Chain|
|ADAS / AV||State-of-the-art Level 2 (Plus unique convenience features )||Fisker + Supply Chain|
|Ownership Experience||Fully Digital; Direct-to-consumer||Fisker (Internal)|
|Retail / Brand Presence||Unique Fisker Brand Experience Centers (Located in major markets)||Fisker (Internal)|
Asset-light approach requires less capital
By seeking out partners with developed platforms, Fisker asset-light approach de-risks its business and differentiates it from other car makers.
The asset-light business model doesn’t require tens of billions of dollars like other EV makers, but it still requires substantial funding. This is because they are not heavily vertically-integrated like other car makers.
Fisker can laser focus on innovation around the customer experience of their electric car. They do not need to be a jack of all trades master of none. It allows them to focus exclusively on creating the best software, sustainability, and highly emotional design.
However, the asset-light approach brings its own set of risk of not being vertically integrated. OEM and supply partners may experience supply chain shortages for Fisker vehicle components now or in the future.
The new financial paradigm
Fisker is setup to deliver compelling and affordable electric vehicles with unparalleled customer experience.
The asset light approach coupled with a direct-to-consumer operating model supports recurring revenue, reduced cyclicality, and a rapid path to production and profitability.
The company believes this model will result in a very dependable, attractive free cash flow profile for investors beginning in 2023 and in the long-term.
In 2023, the company will have its first full year of Fisker Ocean deliveries. The company will have the first Fisker PEAR prototype ready in 2023 with production commencing in 2024. By this time, Fisker will have fully de-risked its business. It will have proven the asset-light strategy works for EV makers, like Apple has done with other consumer tech products.
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