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Friday, Oct 7, 2022

Fisker Revs Up Facilities, Funding Ahead of Ocean SUV Launch

Fisker Inc., a Torrance-based electric vehicle startup, plans to open an engineering and technology center in San Francisco’s Mission District. 

Work at the facility, dubbed Source Code, will focus on software and vehicle interfaces.

“With the development of our first vehicle progressing at speed and the company scaling accordingly, we are now establishing the facilities that can support our expansion,” Chief Executive Henrik Fisker said in a statement.  

“As a company born in California, we wanted to draw on all the diversity, creativity and technical capability this state is famous for,” added Fisker, who’s best known for his designs for the Aston Martin DB9 and BMW Z8 sports cars.

His company went public in July via a reverse merger with Spartan Energy Acquisition Corp. The deal, which valued Fisker at $1.75 billion, will provide the funding to bring its first vehicle, Fisker Ocean, to production in late 2022, the company said.

Spartan, a shell company backed by an affiliate of Apollo Global Management Inc., based in New York, was set up in 2017 to raise funds, via an initial public offering, to buy a firm with ongoing operations. 

It has been listed on the New York Stock Exchange since 2018, with a market value of about $948 million as of Sept. 27 while Apollo’s market cap stands at $10.2 billion. 

Fisker and his wife, Geeta Gupta Fisker, who serves as chief financial officer, will control 89.8% of the voting power of company’s outstanding capital stock. The set up will “enhance (the company’s) ability to focus on long-term value creation and help insulate (it) from short-term outside influences. The Fiskers’ voting control also provides (the company) with flexibility to employ various financing and transaction strategies involving the issuance of equity securities while maintaining the Fiskers’ control,” according to the documents filed with the Securities and Exchange Commission.

The couple will also serve on Fisker’s board of directors, along with Wendy Greuel, who was Los Angeles City Controller from 2009 to 2013; Roderick Randall, a co-founder of Boston-based Vesbridge Partners; Nadine Watt, chairwoman of the Los Angeles Business Council; and Mark Hickson, an executive vice president of corporate development, strategy, quality and integration at Florida-based NextEra Energy Inc.

Following completion of the merger, the company will retain the Fisker name and is expected to be profitable in the first full year of production. It plans to churn out 8,000 SUVs in 2022; 51,000 in 2023; and 150,000 in 2024, while its revenue forecast shows $3.3 billion in sales for 2023, $10.6 billion in 2024 and $13.2 billion in 2025. 

The Fisker Ocean, an all-electric SUV, which debuted at the Consumer Electronics Show earlier this year, will be available via month-to-month lease at a list price of $37,499. 

The lease program calls for a $3,000 nonrefundable down payment and $379 per month for the base model with the ability to terminate the lease or upgrade the vehicle at any time.
The Ocean was designed with “a high degree of sustainability, using recycled rubber, eco-suede interior trim made from recycled polyester, and carpeting from fishing nets and bottles recycled from ocean waste,” according to the company.

Much like Apple Inc.’s iPhone deal with Taiwan-based Foxconn Technology Group, Fisker plans to outsource manufacturing to Volkswagen, the company said in a presentation to investors.

According to the company, outsourcing will “accelerate time to market” by about 50% and “dramatically reduce vehicle development costs.” 

Fisker added that the “asset-light” business model also “avoids substantial investments in manufacturing capabilities and production learning curve” and enables the company to work with multiple vehicle manufacturers as its business scales.
Vehicle service, delivery, trade-ins and end-of-lease collections will likely be outsourced to Pivet, a fleet services provider owned by Atlanta-based Cox Automotive Inc. 

In addition to the Ocean SUV, Fisker said it plans to launch “a super-sports sedan based on the EMotion concept, an extreme sports crossover and a new segment-changing lifestyle pickup truck” by 2025. 

Vehicles will be sold directly to users primarily through company’s Flexee App and Fisker Experience Centers rather than through dealerships. 

Fisker is also planning to offer both financing and insurance for its vehicles directly through its digital platforms. Through Aug. 6, the company has received more than 7,300 paid reservations for the Ocean and 31,500 indications of interest through the Flexee app.

Mediha DiMartino
Mediha DiMartino
Mediha DiMartino covers retail, manufacturing and the ports. She can be emailed here.

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