There are a few hints to potential strategic partnerships lurking on each Fisker earnings call and within investor presentations.
Last month, during the Q4 2021 earnings call, Henrik Fisker said there was interest from global auto rental companies. Fisker went on to say the company has several major deals in the works. He mentioned that these “deals” will be announced within a couple of weeks. Seeing as it’s now been a few weeks since the earnings call it got us thinking about who the potential partners could be in the car rental space could be. And, what other partnerships make sense for Fisker’s business? As a follow up to our post last week, upcoming catalysts every Fisker investor needs to know about, we wanted to explore what partnerships may look like for the company.
Car rental partnerships
The most obvious partnership for Fisker is with car rental companies. One thing is for certain, car rental companies are beginning to transition to electric vehicles. Back in October, Hertz said it would purchase 100,000 Teslas by the end of 2022 and make new investments into its EV charging infrastructure across the company’s global operations.
Henrik basically told us so last month in his prepared remarks on the company’s earnings call. This one is glaring us right in the face, but still leaves a lot to wonder. Will it be a fleet order, a special partnership with the Fisker Flexee Lease program, or something else? Fisker is most likely to get a large pre-order for the Fisker PEAR from a multi-national car rental company. For instance, this is the reason why Fisker opened up PEAR reservations early as deliveries won’t start until 2024.
We believe there will be a major car rental partnership with a European car rental company, supported by Fisker Ocean manufacturing in Graz, Austria. This allows for Fisker to sell a fleet order, or provide even better Flexee Lease pricing, at a discount since taking delivery of the Fisker Ocean will be much less expensive. We believe potential partnerships for the Fisker Ocean or Fisker PEAR could be with either Alamo, AVIS Budget Group, Enterprise, Europcar, National, or Sixt).
Another charging network for the Fisker Ocean and PEAR
Fisker announced a partnership with the charging station network Electrify America back in December 2020. This early partnership should allow Fisker to create a seamless integration into their software before launch. The company even then made an investment into European EV charging company Allego. However, we believe all electric car companies will be making partnerships with multiple charging networks. This allows for a better customer experience and that is what matters at the end of the day.
Here in Southern California, there aren’t very many Electrify America stations, but there are a ton of ChargePoint stations everywhere. EVgo is most aligned with Fisker’s mission to sustainability with a charging network powered by 100% renewable energy. Over time, we believe Fisker will partner with both ChargePoint and EVgo electric vehicle charging companies.
Platform sharing
Fisker partnered with Magna International to develop the FM29 platform to build the Fisker Ocean. The company also partnered with Foxconn to develop the FP28 platform for the Fisker PEAR. There are clues if you look at the company’s latest investor presentation and subsequent ones. Fisker Platform 3 is listed as “TBD” and there are unannounced vehicles still on the roadmap. These could be built either in-house or with a third-party contract manufacturer. It’s possible Fisker builds Platform 3 entirely in-house or with Magna and Foxconn.
Ford and General Motors have been making major investments into electric vehicles. Tesla not at all likely. Apple has reportedly been building their own electric vehicle. Fisker recently joked about Apple needing help on their electric vehicle when a Fisker Karma appeared in a new Apple TV series. For us, it is too hard to say who may be interested in Fisker’s platform. There is something here to be leveraged for a new entrant that wants to break into the space.
We believe a partnership with an existing car manufacture or even a mega tech company is within reach. It could be any of the aforementioned or a company out of the blue. We could see Fisker partner with a tech company to do something innovative. Then add a contract manufacturer like Magna or Foxconn to produce it for the masses.
Financing the Fisker Ocean
Summer 2022 will be here before we know it. Reservation holders will receive a call to purchase their Fisker Ocean One before the end of year. How will they pay for it? According to Statista, more than 80% of new cars are financed. The company will unlikely finance electric vehicle purchases in-house. Most of the $1.2 billion cash needs to go towards Fisker Ocean production and current projects. That leaves partnering with a financing company for auto loans. Since Fisker is reinventing the traditional car lease with the Fisker Flexee Lease program, they will work with an innovative finance partner. All of this leads us to a FinTech company. We believe it is possible for a partnership to happen with SoFi or Upstart as both company’s offer auto loan products for Fisker’s electric vehicles.
Partner to handle trade-in
Also, Fisker has not shared its plan for handling customer trade-ins. People buying a Fisker Ocean may need to sell their existing vehicle before purchasing a new one. We believe Fisker shouldn’t get into the trade-in business. Rather, Fisker should partner with a company like Carvana or Carmax to facilitate this part of the auto buying experience. Maybe they will even expand their partnership with Cox Automotive for their trade-in services.
In conclusion, there are a lot of possibilities for Fisker to strike “major deals” with any company let alone the ones mentioned herein. In the near-term, we believe Fisker partnerships with car rental companies have the highest probability in the near-term.
We are shareholders in Fisker Inc. ($FSR). We hold a long beneficial ownership position in Fisker Inc. through stock and options. We have no stock, option or similar derivative position in any of the other companies mentioned, and no plans to initiate any such positions within the next 72 hours. Articles published on Fiskerati express our own opinions. We are not affiliated with or compensated by Fisker Inc. The information published in articles on Fiskerati are general in nature and should not be relied upon as personal financial advice.
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