Electric vehicle startup Fisker is warning investors that there is “substantial doubt” it will have enough cash to make it through 2024.
To survive 2024, the company told investors Thursday it would begin streamlining its operations, starting with layoffs affecting 15% of its workforce. As of September 2023, Fisker had more than 1,300 employees, so almost 200 people may lose their jobs.
“We are aware that the industry has entered a turbulent, and unpredictable period,” CEO Henrik Fisker said in a statement.“With that understanding and taking the lessons learned from 2023, we have put a plan in place to streamline the company as we prepare for another difficult year.”
Fisker said last year was “challenging,” marked by supply delays and issues that prevented it from delivering its Ocean electric SUV, which was first sold in June 2023. The executive also cited rising interest rates, difficulty finding skilled labor, and issues locating real estate to support its direct-to-consumer model.
As part of cost-cutting measures, Fisker recently moved away from the direct-sale model to dealerships, which it said could help save money. As a result, employees working in direct sales are likely to be laid off.
The California-based company lost $463.6 million during the last three months of 2023, compared to just $200 million in revenue, according to its latest quarterly report. That includes a $325 million adjustment related to convertible notes. Fisker’s loss from operations was $103.5 million.
Despite those losses, Fisker said it aims to grow its footprint in 2024. Henrik Fisker said his startup is in “negotiations with a large automaker” for a transaction that could include investing in Fisker and a partnership to create “one or more electric vehicle platforms.”
But even if Fisker does establish a new partnership, the company still faces many other issues.
A short seller in 2022 released a report alleging Fisker’s access to funds is limited by undisclosed bank guarantees to Austrian manufacturer Magna Steyr. Fisker was also accused of basing the Ocean’s platform on that of a Chinese crossover also made by Magna Steyr. Fisker has denied both claims.
The Ocean has also been the source of more than 100 complaints filed with the National Highway Traffic Safety Administration, which is investigating the reports. Owners have reported instances of their vehicles suddenly losing power and seeing their SUV’s front hood flying up at high speeds.
Fisker’s founders and board of directors have also been sued by shareholders in federal court in California. The lawsuit alleges that Fisker’s executives failed to disclose material weaknesses in its financial reporting, inaccurate accounting, and delivery limitations. Rather than disclose that information, the lawsuit says, Fisker focused on “positive statements about ramping up the production phase.”
Fisker stock plummeted by more than 25% on Friday. The stock has dropped by more than 92% over the last year.