In a bid to free up $300 million in working capital, California-based electric vehicle (EV) startup Fisker has cut its annual production guidance. The company expects to produce around 10,000 vehicles this year.
Production Guidance Reduced by Half
This latest update marks the fourth reduction in Fisker’s production target since the spring. Initially, the company had forecasted producing 42,400 Ocean SUVs by the end of 2023 due to strong demand in the U.S. and Europe. However, this figure was revised down to 32,000-36,000 vehicles in May and further reduced to 20,000-23,000 vehicles in August.
New Strategy to Improve Deliveries
Fisker has introduced a new strategy aimed at improving deliveries in the U.S. and Europe. This involves adding more transportation logistics companies to speed up deliveries, increasing outreach to reservation holders, and opening more facilities dedicated to retail, deliveries, and service.
Why Did Fisker Need to Reduce Its Production Guidance?
Fisker’s decision to cut its production guidance is largely attributed to market challenges faced by the EV industry. Strong demand for Fisker’s Ocean SUV has not been enough to offset production issues, leading the company to reassess its targets.
Impact of Reduced Production on Working Capital
The reduction in production guidance will allow Fisker to access $300 million in working capital. This influx of funds is expected to provide the company with greater flexibility as it navigates the challenges posed by market conditions.
CEO Henrik Fisker’s Take on the Situation
Fisker’s CEO, Henrik Fisker, stated that despite not meeting its original forecast, the company has performed well considering current market conditions. He emphasized that Fisker is accelerating sales and deliveries, generating considerable revenue in the process.
New Hires to Strengthen Fisker’s Leadership
In a bid to bolster its leadership team, Fisker has recently hired several new executives, including Dan Quirk as executive vice president of finance and accounting. Other hires include Axel Buhr, Ram Iyer, and Wolfgang Hoffmann, who will be responsible for various aspects of the company’s operations.
Fisker Expands into Leasing
In an effort to expand its offerings, Fisker has announced plans to launch a leasing program in the U.S., Canada, and Europe. However, details on the program’s specifics are yet to be disclosed.
Enhanced Focus on Sales and Service Offerings
As part of its strategy to drive growth, Fisker is sharpening its focus on expanding its current markets and enhancing sales and service offerings for the Ocean SUV.
Conclusion
Fisker’s decision to cut its production guidance marks a significant development in the EV startup’s journey. As the company continues to navigate market challenges, it remains committed to delivering high-quality vehicles to customers while driving growth and revenue.
