California EV start-up Fisker has launched what it calls an "innovative dealer partnership" — which will supplement its existing direct sales models — in an effort to counter its well-documented delivery struggles.
Direct sales models have been a trademark of EV disruptor companies in the auto industry since BEV market leader Tesla began using the strategy to great success.
The shift to direct-to-consumer sales allows OEMs to realise higher price points, since dealerships must adhere to the manufacturer-set retail price and can no longer undercut one another, consultancy BCG found in a February 2023 research.
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"Additionally, sales costs are lower in online channels than through dealerships," BCG concluded. "And, thanks to digital technologies, OEMs can capture, own, and use the data critical to building strong customer relationships."
But under its direct sales model, Fisker delivered only around 4,700 of the 10,142 EVs it made in 2023. Management has repeatedly reiterated confidence in demand, instead blaming the firm's delivery infrastructure.
The new plan promises to bring savings on delivery logistics for Fisker because it allows the company to deliver EVs to a limited number of dealers, rather than to widely distributed individual customers. This comes after CEO Henrik Fisker admitted at Q3 results that "it just is not going fast enough for the home deliveries".
Fisker has in recent months been rapidly hiring sales staff for its own sales showrooms, which it calls lounges. It is unclear how the new strategy will affect this sales model.
Under the new strategy, Fisker expects to have around 100 dealer locations and that it will begin delivering Ocean EVs to new dealers by the end of the first quarter.
"We are evolving our business model and intend to add as many as 50 dealer partners in the US and Canada and a similar number of dealer locations in Europe this year. In keeping with our asset light strategy, I expect the dealer partnership model should enable Fisker to expand its sales and delivery network at a faster pace," says eponymous CEO Henrik Fisker.
The 'asset light' approach is similar to that adopted by Vietnamese automaker Vinfast. Under it, dealers will also take on aftersales support and "facilitate financing and insurance arrangements and assist customers with matters related to Fisker’s warranty".
While Fisker has not commented on the financials of the dealer arrangements, Vinfast's model involves the automaker discounting the take-in price for the dealer and looks to expect high volumes to compensate for decreased margins.
But Fisker says it is also expecting that dealers will be able to "maintain pricing without concern for local competition", a result of Fisker providing vehicle dealers with larger market territories. At least until Fisker's production reaches mass market volumes, it is more important to maintain pricing and margins.
The firm plans to have "have all its initial dealer partners in place when higher-volume vehicle models arrive in the marketplace in the future".
"The company is implementing this approach to expedite the expansion of its sales, delivery, and test drive network. Fisker expects that its first dealers will start receiving vehicles by the end of Q1 2024," it continues.
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
