We analyze the playbook for Fisker to achieve a victory next quarter, with a focus on deliveries, service excellence, and strategic partnerships.
Today, we’ve been bombarded with inquiries about Fisker’s latest quarterly results by email, text, and various social media sites. For those of us invested in Fisker shares, this day stands out as one of the most challenging we can recall. It’s been a painful day to own this stock, especially when stock market indices roared higher. The S&P 500 closed the day up 1.91% and the small cap Russell 2000 index soared an unprecedented 5.44%. However, Fisker stock took a significant hit. It closed at $3.34, a decrease of -$0.77 (-18.73%), with a hefty trading volume of 39.5 million shares—approximately 5.5 times the daily average.
Analyzing Fisker’s Stock Performance
Year-to-date, Fisker’s stock has experienced a substantial decline of around 54%. Despite the current decline in share value, it’s important to note that this setback does not signify the demise of Fisker as many will have you believe. With $625 million in cash reserves, a solid production setup at Magna Steyr, and substantial vehicle inventory, the company is far from out of the game. However, given its ambitious plans, evidenced Fisker’s electric vehicle pipeline, including PEAR, Alaska, and Ronin, Fisker will inevitably require additional funding to support these ventures sometime in the future. A low stock price adds pressure.
We view the recent downturn in Fisker shares as a cautionary signal rather than a definitive endpoint. It underscores the imperative for the company to redirect its focus and address underlying business challenges. While the existing financial resources provide a buffer, we believe strategic measures and a reevaluation of business strategies are essential to navigate the company through this period of volatility and propel it towards long-term success. Now, let’s explore the areas we believe the company can focus on in preparation for the next quarter.
Strategic Focus for Fisker’s Comeback
In the current scenario, it seems as if Team Fisker is trailing at halftime, and the current scoreboard isn’t promising. However, as any seasoned sports fan knows, a game can take a dramatic turn in the second half. Fisker may be trailing now, but the final whistle hasn’t blown. To stage a comeback, the team—Fisker, in this case—needs to step up its game in key areas.
Much like a sports team focusing on improving its offense, defense, and teamwork, we believe Fisker must excel in three critical aspects: vehicle deliveries, service and support, and partnerships. Just as a winning team tightens up its strategy during halftime, Fisker has the opportunity to refine its game plan, execute flawlessly, and, with a bit of grit and determination, turn the (ocean) tide in the latter part of the match. It’s not over until the final buzzer, and Fisker has the chance to come back stronger and score big in the next quarter.
Scale Fisker Ocean Deliveries
Yesterday, Fisker provided detailed insights into its delivery figures. For Q3 2023, the company successfully delivered 1,097 vehicles, following the delivery of 11 vehicles in Q2 2023, resulting in a cumulative total of 1,108 vehicles. Notably, Fisker has already surpassed this number by delivering over 1,200 vehicles in October, considered part of Q4 2023. Additionally, the company proudly announced a global delivery milestone of 3,000 vehicles to date.
During the conference call, Fisker expressed confidence in their trajectory, asserting that November’s delivery numbers are poised to exceed those of October. With the available information, it can be inferred that Fisker has delivered nearly 700 vehicles in the month of November alone. While this is good, the company has a lot of work ahead of it to delivery 300 Fisker Oceans per day which it believes it can do by the end of the year.
Fisker attributed challenges to its delivery infrastructure during the conference call. The company admitted underestimating the complexities of transporting vehicles from Europe to the United States and into the eager hands of customers. However, a silver lining emerged as Fisker discovered customers’ willingness to travel to a Fisker location for vehicle pickup. In response, Fisker has laid out plans to establish more Fisker-owned pickup sites for customer convenience.
Currently, 15 Ocean pickup facilities, including locations like Huntington Beach, Long Island (Center+), Tempe, and Owings Mills, are either open or have Letters of Intent signed. The company aims to enlist more transportation partners equipped with enclosed vehicle carriers. Adding a personal touch, Fisker introduced ‘Fisker Direct,’ where a dedicated employee transports the new vehicle from a distribution center to a customer’s home for journeys less than 60 miles, accompanied by an in-person orientation.
World-Class Service & Support
The Fisker Ocean is gaining traction due to robust demand, fueled by real-world advertising such as TV ads, test drives, and retail store openings. The heightened interest in the vehicle is evident in the daily visitors to the Fiskerati site. While meeting demand is crucial, Fisker must prioritize existing customers, ensuring top-notch service for those who’ve received their Fisker Ocean and those in the pipeline. Positive word-of-mouth promotion hinges on exceptional service being the driving force.
To achieve this, Fisker should accelerate the deployment of fleet-wide over-the-air software updates, clearly communicate version information installed on each customer’s vehicle, and intensify efforts in hiring and training mobile service technicians and call center support staff. Currently, the company has approximately 75 mobile service technicians. More are needed. The exact number is unclear, but customers should receive service within a reasonable amount of time after reporting an issue—7 to 10 days seems like a good near-term goal. The same applies to customer service; emails need timely responses, whether sent to a vehicle admin or support staff. We believe Fisker will rise to the challenge to improve wait times for service and support.
Forging and Finalizing Partnerships
For Fisker to excel, we emphasize the significance of forging and finalizing strategic partnerships. A pivotal collaboration centers around the Fisker PEAR, and in May 2021, Fisker and Foxconn inked framework agreements for joint development. Although the intricacies of this agreement are likely complex, its finalization has been a long process. Henrik Fisker expressed optimism yesterday, anticipating that the Foxconn manufacturing agreement would be concluded by the year’s end—undoubtedly a crucial milestone. While this agreement holds paramount importance, we believe that Fisker could benefit from cultivating additional partnerships.
Fisker has come out and said they need to do better with deliveries and supporting customers. Ok, what partnerships could Fisker forge to improve this aspect of its business? Consider, for example, the role of real estate in facilitating deliveries. To address this, a collaboration with a company open to enabling on-site customer deliveries, in contrast to Adesa, could be advantageous. One prospect we’ve explored on the forum involves car rental companies. Perhaps a nationwide car rental entity could provide Fisker with a modest storefront, allowing customers the convenience of on-site deliveries and more customer interaction.
Moreover, Fisker could establish partnerships with an existing nationwide total auto care company in the United States to strengthen its mobile service technicians. Whether partnering with a company that already possesses an established service infrastructure or one with its own mobile service technicians, all that Fisker techs requires are a toolkit and a laptop. Another avenue involves collaborating with universities that train skilled automotive technicians, offering graduates a guaranteed position as a means to bolster its support efforts. We could think up a lot of potential partnerships, and specific companies, for Fisker to enhance operational efficiency and customer engagement.
The Way Forward
In summary, Fisker’s recent stock challenges serve as a cautionary signal, not a definitive endpoint. Despite a significant decline, the company, armed with substantial cash reserves, no production challenges, and a robust vehicle inventory, is poised for a potential Q4 2023 comeback. The analogy of a halftime score emphasizes that the game is not over, far from it.
To stage a successful comeback, Fisker must prioritize improving vehicle deliveries, enhancing service and support, and forging strategic partnerships. Analysis of delivery figures reveals both achievements and areas for improvement, with proactive steps already taken to address delivery infrastructure challenges.
World-class service is pivotal for customer satisfaction, necessitating accelerated software updates, increased mobile service technicians, and improved response times. Strategic partnerships, especially with Foxconn for the Fisker PEAR, are progressing but need to be finalized. Fisker should focus some attention to exploring collaborations to further enhance operational efficiency whatever that looks like.
In essence, we believe Fisker’s challenges are opportunities for growth. With a focused strategy and determined execution, the company has the potential to turn the ocean tide and thrive in the electric vehicle market. The game is not over, and Fisker could still score big in the next quarter. Please share your ideas in the comments below.
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