Fisker is shedding 15% of employees and says it wants extra cash forward of a ‘troublesome 12 months’

Electrical automobile startup Fisker is planning to put off 15% of its workforce and says it probably doesn’t have sufficient money readily available to outlive the subsequent 12 months. The corporate says it’s looking for a strategy to elevate that cash as it really works by means of a pivot from direct gross sales to a dealership mannequin.

“[W]e have put a plan in place to streamline the company as we prepare for another difficult year,” founder and CEO Henrik Fisker mentioned in an announcement. Fisker reported greater than 1,300 staff as of the top of September 2023, that means the reduce may have an effect on near 200 folks. The corporate’s share value plunged 35% in after-hours buying and selling.

Fisker mentioned Thursday that it completed 2023 with $396 million in money, although $70 million of that’s restricted. The corporate says it’s speaking with considered one of its lenders about making “an additional investment” within the firm. It additionally claims it’s “in negotiations with a large automaker for a potential transaction which could include an investment in Fisker, joint development of one or more electric vehicle platforms, and North America manufacturing.”

A partnership like that will probably be essential, as Fisker executives mentioned on a name Thursday that it received’t make investments any more cash in its future merchandise except it really works with one other automaker. Meaning the fates of a pickup truck, compact EV and different fashions that Fisker has teased are actually in query.

The corporate’s monetary struggles come as it’s attempting to maneuver to a wholesale mannequin constructed round partnerships with sellers, a shift that Fisker says has “negatively impacted” its gross sales up to now. It’s presently sitting on stock of hundreds of automobiles which are collectively value greater than $500 million. Fisker says it has acquired curiosity from round 250 dealerships however has solely signed up 13 thus far.

Fisker has additionally been coping with various issues with its Ocean SUV, its solely mannequin up to now, as TechCrunch reported earlier this month. The corporate has mentioned it resolved some points with a software program replace in December and deliberate to repair many extra in a bigger 2.0 replace earlier this month, however that solely began making its strategy to buyer automobiles this week. It’s presently being investigated by the Nationwide Freeway Visitors Security Administration for stories of sudden brake failure, in addition to for a handful of auto rollaway incidents.

A lot of huge automakers are pulling again on their aggressive EV targets, and newer gamers are having hassle as properly. Rivian lately announced it was chopping 10% of its workforce and that it expects to make across the similar variety of EVs this 12 months because it did in 2023. Lucid Motors plans to construct round 9,000 automobiles this 12 months after once predicting it will be constructing 90,000 by this cut-off date.

Fisker has all the time differentiated itself from different EV startups, although, because it pursued an “asset light” enterprise mannequin. It designed the Ocean however outsourced the manufacturing to Magna Steyr in Austria. That call helped it get automobiles on the highway quicker than another startups, although it has imperiled the corporate in different methods. For example, its Ocean SUV isn’t eligible for the point-of-sale federal EV tax credit score as a result of the automobile isn’t manufactured in North America.

In the end, Fisker mentioned Thursday that it offered simply shy of 5,000 Ocean SUVs in 2023 and generated $273 million of income, after beginning shipments in earnest in June. It misplaced simply shy of $761 million throughout the complete 12 months. Magna produced simply over 10,000 Oceans, and Fisker mentioned it hopes to begin delivery these to its new seller companions with a purpose to generate near-term money. The corporate declined to say on the convention name what number of automobiles its preliminary companions have ordered or plan to order.

Like many different EV startups that went public by merging with a particular function acquisition firm, Fisker has had a number of rising pains as a public firm. It needed to delay the discharge of its third quarter 2023 monetary leads to half as a result of it discovered weaknesses in its inner monetary reporting. Round that point, it additionally had two completely different chief accounting officers resign.

These issues continued Thursday, as Fisker mentioned it will likely be late reporting its full 2023 monetary outcomes. It additionally revealed it has found one other materials weak spot associated to its “revenue and the related balance sheet accounts.” Because of this, it couched the monetary figures it launched Thursday as “preliminary,” going as far as to append an asterisk to the headline of the press launch.