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Fisker (FSR) stock is rising after a rough Friday morning. The company cut 15% of its workforce, missed its production target by 13,000 vehicles and warned of a 37% loss.Mr. Fisker’s afternoon surge was due in part to the Reuters report., The report details that Nissan (NSANY) could invest $400 million in the automaker’s truck platform.
Fisker CEO Henrik Fisker joins Yahoo Finance to discuss the company’s performance, including layoffs and transition to a dealer model.
Fisker was unable to comment on the reported deal with Nissan, but did respond to questions about the automaker’s negotiations with original equipment manufacturers (OEMs). A lot of work has already been done so we hope the deal will be completed as soon as possible. ”
For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor’s note: This article was written by Nicholas Jacobino
video transcript
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– Fisker shares closed sharply lower, but recovered some of their losses following reports that Nissan Motor Co. was in talks to invest more than $400 million in the business. According to a report by Reuters. The EV maker, which reported weak results yesterday, issued a going concern warning and announced it would cut 15% of its workforce.
We’re pleased to welcome Henrik Fisker, CEO of Fisker. Henrik, first of all, thank you very much for joining us. Obviously, you have a lot of work to do right now. Thank you very much for your time.
I would like to start with the Reuters report. Because you said in your phone call and in your statement that you were in negotiations with the automaker. Reuters says it’s just Nissan. Could you please check that and give us the details?
Henrik Fisker: No, I can’t comment on that. And I don’t want to comment on speculation. But we said we are in talks with OEMs to develop and manufacture electric vehicles in the United States and invest in them.
– So I guess the question is, what’s the next step? What are the next concrete steps to keep Fisker running?
Henrik Fisker: Well, what we’re doing is pivoting to a dealer model and being able to reach more customers, not only in the United States but also in Europe, and that’s been working very well. Currently, we are registering as dealers almost every day.
The reason we’re so interested is because it’s the only real competitor to the Tesla Model Y, the world’s best-selling EV. And we have a longer range than that vehicle. There are features that cannot be achieved with that vehicle. And it’s the same quality, if not more expensive.
So I think our dealers are very excited to finally have a competitor. Also, getting EVs from independent EV manufacturers means that so far all dealers have been sitting on the sidelines for about a decade to see how other EV manufacturers and new EV manufacturers sell directly to consumers. It’s a body. So I think they’re very excited to get our vehicles.
– So I’m curious, Henrik, I understand you’re not going to talk about speculation about Nissan, but could you give us a timeline for when an agreement could be reached regarding a potential deal?
Henrik Fisker: Well, we obviously started talking to some OEMs over six months ago, so we’ve obviously done a lot of work already. So we hope that this transaction that we’re working on can be completed as soon as possible. We cannot provide an exact schedule at this time. But it’s not like we started talking yesterday, so this is definitely hoping to sign a deal with his potential OEM as soon as possible.
– Your goal is to produce 20,000 to 22,000 Fisker Oceans this year. I think he produced just under 4,800 units in the fourth quarter. Can you give us any updates on production so far in the first quarter?
Henrik Fisker: So we don’t have the production problems that many other startups have because we have a contract manufacturer, Magna Steyr, who can produce 50,000 or 70,000 vehicles if we need them. So what we’re currently working on is delivery prediction.
And if that prediction comes true, or if it actually happens, they’ll be able to sell even more vehicles, and there are actually some dealers out there, but the truth is, they don’t really have enough vehicles. I was worried. And if they can sell more vehicles, they can increase production very easily. That is the advantage of our company doing contract manufacturing.
– I would also like to talk about other deals that we are considering. Another deal we heard is with Foxconn. Could you tell me about the status of that transaction?
Henrik Fisker: No, I mean, right now we’re focused on OEM contracts. That’s the main focus. We’re a small startup, so we have to focus on one deal. That’s very important to us. And we’re obviously focused on strategic deals and deals that we think are best for us over the long term.
– Henrik, this is your second time at an emerging car manufacturer. Looking back on the past year, or even the past few years since your founding, what led you to this location? What do you think is the biggest challenge?
I know last time there was something exogenous. For example, there was a hurricane. What do you think is the biggest obstacle for Fisker to move forward without falling into this cash-strapped situation this time around?
Henrik Fisker: First of all, we believe there is a future. Otherwise, I wouldn’t be here. And I believe that we will somehow get out of this situation. It can be said that a general EV recession exists. There is still a lot of interest in our vehicles. And the EV market has been in a tough spot in recent months.
However, we believe that by shifting our focus to a dealer model, we will actually accelerate sales even more than before. From the third quarter to the fourth quarter, sales increased by 250%. And our current forecast is for sales to continue to increase despite the EV slump. We think that’s because we have a great and competitive vehicle starting at $38,999.
– Henrik, I know you said the company might not be able to sustain itself for the next 12 months with its current capital. There are potential challenges ahead regarding stock prices and listing on the New York Stock Exchange. It’s a kind of make-or-break moment for your company, and you’re at the helm.
So, I’m curious about what it’s like to be a leader? And how do you handle these kinds of defining moments for your company?
Henrik Fisker: Well, I don’t think that’s the defining moment. I think this is obviously based on future concerns that you foresee – I think specific scenarios. I think what we’re doing and what I’m doing is accelerating dealer registration. Basically, getting more dealers faster is what we’re doing.
In fact, we’re shipping the vehicle to our first dealer today. So we did it incredibly quickly. We announced this in January. So I’ve already gained an amazing 17 new dealer points and I expect him to have 50 points by the end of this quarter. So what we do is generate more cash faster. And the way we do that is by increasing sales.
By the way, every car we sell in the first half of this year is almost pure cash for us because we’ve already bought and paid for all the parts. We also manufacture vehicles that are in stock and ready to ship. So this is pure cash income for us and it would be even more difficult otherwise. But given that, I actually feel very optimistic about our future.
– It just displays the stock price. And Mr. Matti alluded to the idea that you could be delisted for violating NYSE compliance. Do you think you can get back into compliance in time to avoid such consequences?
Henrik Fisker: Yes, I believe. I believe so. First of all, you have six months to do it. But we also believe that we are on track in terms of dealer agreements and potential strategic OEM deals. All these things will happen long before we reach that point. Therefore, I am very confident and believe that our stock price will rise. In fact, I think I’ll do it next month.
– Henrik, I look forward to seeing you as we continue this journey. Thank you very much for your time.
Henrik Fisker: thank you very much.
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