Fisker keeps mum on Pear battery costs

California start-up Fisker made waves last month with the promise that its Pear crossover would sell for sub-$30,000. Whether it can achieve it, and at a profit, remains to be seen.

“There is no EV under $30,000, let alone a cool EV,” CEO Henrik Fisker said on the company’s Q2 results call, calling the Pear “the most exciting vehicle of the century under $30,000”. Industry observers note, however, that the company offers relatively few details about how it will reach this pricing level — especially given the CEO said he expects to make a positive margin on the car.

The company has now provided an update on the specifications of the Pear, but details about the battery – the costliest component of an EV – remain conspicuously absent. Despite this, the company has committed to its previous pricing promise, saying that the Pear will retail at $29,900 before incentives.

The CEO has previously mentioned the Pear’s body structure as a key ingredient to pricing efficiency. “Our innovative engineering team to have come up with a completely new body structure for this vehicle,” he said. “And that is really one of the reasons we can sell it for under $30,000 and we will still make money on it.”

But there is scepticism that bodywork alone can cuts costs to the extent that Fisker has promised, with battery components comprising a far greater chunk of the overall cost of an EV. The firm is currently supplied by China’s Catl, which last month announced its new Shenxing lithium iron phosphate (LFP) battery, which is is expected to be in mass production by the end of the year.

LFP promises to be significantly cheaper than the alternative nickel cobalt manganese (NCM) technology, which could help bring Fisker’s costs down. “Using NCM in the cathode is going to naturally increase the direct supply costs of the overall individual battery manufacture versus an LFP battery. Sourcing cobalt [as well as] lithium is very costly, so you also need to consider other trade-offs for the cost,” says Stuart Cooper, a consultant at Strativ.

But the only mention of battery in Fisker’s update on Pear is that “two battery options will provide an estimated range of either 180 miles, aimed at being the lightest and most sustainable version, or an estimated 320-mile range for longer trips”. And, in the absence of more details, analyst doubt about the achievability of Fisker’s price promise remains.

Challenge

“It will not be easy for Fisker to get to, and sustain, the targeted price point,” warns Pavel Molchanov, a managing director at US investment bank Raymond James.

In 2023, there are only two EVs for sale in the US market that are below the $30,000 level — the Chevrolet Bolt and Nissan Leaf, he notes. Three others — the Mini Cooper, Hyundai Kona and Mazda MX-30 — are between $30,000 and $40,000.

“Even allowing for lower battery costs by 2025, sub-$30,000 pricing is clearly the exception rather than the rule. There are lots of other cost variables that may end up leading to a higher price point, such as steel and labour," Molchanov cautions.

The Pear will be built in the US at a factory in Ohio, which Fisker is building in partnership with Taiwanese electronics heavyweight Foxconn. Deliveries are slated to begin in mid-2025.