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The US EV pure play trumpets the profitability of its Ocean launch and promises two new sub-$40,000 models
The newly unveiled Fisker Pear is “the most exciting vehicle of the century under $30,000”, according to the company’s eponymous CEO Henrik Fisker. And he is also promising that the new Alaska e-pickup will sell after incentives at less than $38,000.
The two planned launches “really will allow us to grab a huge part of whatever market we go in, because we do not see a lot of competitors for any of these vehicles quite frankly, when you look at what other car companies have announced”, Fisker predicts.
“There is no EV under $30,000, let alone a cool EV,” says Fisker of the Pear, which like the Alaska is scheduled to be available for sale in mid-2025. “I think we showed yesterday [at Fisker’s product vision day] how cool the Pear is.
“I want to congratulate our innovative engineering team to have come up with a completely new body structure for this vehicle,” Fisker continues. “That is really one of the reasons we can sell it for under $30,000 and we will still make money on it.”
As for the Alaska, “there is no electric pickup truck in that [price] segment,” Fisker boasts. “And I do not believe there is any electric pickup truck as cool, as sporty as the Alaska is,” he continues, boasting of “1,000 orders overnight” for a vehicle offering “huge potential”.
“The good news is that vehicle has a lot of Ocean carryover parts, so we should be able to get that very fast into production,” says Fisker. “We are probably in the region of about 85pc to 90pc, so I would say it is extremely high commonality. It is really just an extended Ocean platform where we have added wheelbase towards the rear.”
"And I believe we are going to have very high profit margin for that vehicle as well,” he predicts. Which might pique other parties’ interest. “Obviously, having a strategic partner would mean we might even be able to bring [the Alaska and Pear] faster to market in higher volume,” says Fisker.
“That is something we are looking at. It is not something that is a must. We continue to have interesting discussions with different potential partners,” he continues.
Launch mode
Fisker was able to present its Q2 results for the first time as a producing OEM. And while it was unable to deliver a sparkling update on production and sales thus far — owing, the firm says, to supplier constraints — it remains bullish on both and on margins, albeit with a bit of financial engineering to get to the most headline-grabbing figure.
The firm produced 1,022 vehicles in Q2, with majority of the production in late May and June. It exceeded a target assembly rate of 80 units per day at the end of June.
In July, 1,009 units were produced, up from 741 units in June, with the peak daily assembly rate hitting 140 units, a 75pc improvement from June's daily peak — “unprecedented for a start-up”, according to CFO Geeta Gupta-Fisker. And July was only a partial month, with a summer shutdown at the Austrian Magna Steyr plant, which will continue into mid-August.
Of the 60 vehicles Fisker took delivery of in June, Fisker supplied only 11 to customers by the end of that month. To date, roughly 120 vehicles have been delivered to customers in four countries and five US states.
But that number is predicted to increase rapidly to “tens of hundreds of vehicles every day”, says Gupta-Fisker, due to the number of vehicles in-transit to multiple countries including the US, Austria, Germany, Denmark, Sweden and Norway.
The firm has revised down production guidance for 2023 to a 20,000-23,000 range as a “compressed timeline of producing these units in half-a-year are challenged by only one supplier's near-term ramp capability due to limited hours in a day for their labour to ramp their product”.
But Fisker himself remains bullish. “We can very fast get to our 300 cars production a day; we will achieve that in the next couple of months,” he predicts.
“Ultimately, when we get to 300 cars a day, that is 6,000 cars a month, and that is overachieving on a yearly production [rate] of 50,000, which was our original goal. We will overachieve on the monthly target already this year,” says Fisker.
Without further capex, Magna Steyr capacity can expand to 70,000/yr, according to Gupta-Fisker. “We expect to increase capacity next year,” she says. “We are investing in additional battery capacity to support higher volumes than originally anticipated next year.”
Going global
On the sales side, Fisker currently has customer locations open in Austria, Denmark, Germany, Norway, Sweden and the UK. Its North American flagship location at The Grove in Los Angeles, CA has completed all construction and is awaiting final inspection this month before opening.
Additional upcoming locations before the end of the year include France, and, in the US, Arizona, Maryland, New York and Tennessee, which will push Fisker locations up to 15 globally. In addition, the firm has “a few dozen other properties in negotiation in North America and in Europe, and they will also come online this year”, Fisker promises.
The firm achieved US homologation of the Ocean Extreme trim in Q2 and achieved an Environmental Protection Agency range of 360 miles, “which is the longest range of any electric SUV in our class”, says Fisker. “Of course, in Europe, it is actually the longest range of any electric SUV on sale.”
Extreme goes alongside the basic Ocean One trim, while Fisker is currently working through the homologation process for Ultra and Sport trims. It expects customer deliveries of these two new options to begin in the autumn.
And Fisker is “pretty excited actually that both the Ultra and the Sport… will actually also overachieve on specifications like range when we get the final certification”. “I think both of these vehicles will be best-in-class and offer more range than any of our competitors. So this will obviously broaden all the customers that we have available in this segment,” he predicts.
The firm has also announced limited edition Ocean deliveries into India, scheduled to begin in Q4 this year. “We actually see India as a key market for our vehicles, especially the lower price Pear.
"Of course, India now is one of the largest car markets in the world. And we expect, from 2026, India actually will start accelerating electrification,” says Fisker.
The US OEM is also dipping its toe in China, with plans to open a delivery centre there later this year, aiming to start deliveries in Q2 next year.
Fat margins
One of the most eye-catching takeaways from Fisker Q2s is the firm’s view on its margins. “I do not know of any EV start-up that ever made a double-digit profit margin on the very first cars,” Fisker says.
But reading too much into initial margins may be unwise, not least because there were only 11 completed customer deliveries in Q2, of which three were in a “unique situation”, Gupta-Fisker cautions. These three cars went to early-stage investors who provided Fisker with capital “very early on at lower interest rates in return for a free base vehicle”. “They paid the difference between the base and Ocean One price,” the CFO explains, adding that there are up to 30 of these arrangements in total.
Q2’s positive gross margin, including these three discounted cars, was thus 7.5pc; $62,000 to emphasise the relatively small scale of the overall numbers. It is only for eight cars sold at full price that this margin figure goes up to the double-digit boast of an “astounding”, to quote Gupta-Fisker, 18.5pc.
Gross margins for full year 2023 are forecasted at a more moderate 8-12pc range “despite exceeding targets in Q2, provided input costs do not change dramatically”, says the CFO.
Nonetheless, when other Western OEMs are struggling with loss-making EVs, Fisker’s predicted profitability is not to be sneezed at. How has it achieved it?
“The first critical topic is to design and engineer a vehicle where you have thought about gross margins, you have thought about material input, you have thought about the number of parts,” says Gupta-Fisker. “We, from the get-go, created an organisation that thought about selling a $37,500 car, not a $100,000 car. So the entire organization thinks about fewer parts; the entire organisation thinks about a steel stamp body, how can we engineer the car for more efficiency.”
“I am really excited about positive gross margins,” says Fisker. “Normally, in an EV start-up, you are running two or three years with massive losses, which obviously means you need to raise a lot of money just to cover those losses. We are not in that position. We now have a programme, the Ocean, which has started paying some of the bills.”
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