Magna expects no further Fisker Ocean production

Canadian automotive parts manufacturer Magna International is guiding to build no more Fisker Ocean SUVs, one of the clearest signs to-date of a lack of faith in the embattled Californian EV pure play's efforts to avoid bankruptcy.

Fisker outsourced production of the Ocean e-SUV to Magna, and has no obvious means to continue producing vehicles outside of the collaboration. Fisker has been facing the threat of insolvency for several months after an investment lifeline from a major OEM was withdrawn in March.

"It is important that I provide an update on our current status for the Fisker Ocean program. Production of the vehicle is currently idled. Our current outlook issued today assumes no further production," Magna CEO Swamy Kotagiri told analysts on the firm's Q1 results call.

Magna expects to take a significant hit to its bottom line with the ending of its supply deal to Fisker, with CFO Pat McCann saying that the company has "effectively written off 100pc of our Fisker assets". 

The assumption of no further Fisker Ocean assembly also "reduces our 2024 sales by about $400mn and impacts our adjusted EBIT margin by about 25 basis points", CEO Kotagiri says.

Fisker first halted production of the Ocean — currently its only EV on the market — in mid-March, prior to its potential OEM saviour backing out of the vital funding deal. At the time, it flagged only be a six-week pause.

The automaker will still be able to sell from its large inventory of vehicles, however, as management confirmed in March that the company's stock of unsold units was worth over $200mn.

Fisker itself has not commented on Magna's remarks, having not made any public pronouncements since agreements with several new dealer partnerships in Florida last month. However, Magna's comments come at the same time as reports that Fisker has begun layoffs ahead of closing down its Manhattan Beach, CA head office.