Fisker warns it is running out of cash and may not arrive until 2024 | Top Vip News

Sales of electric vehicles have increased, but companies that depend their entire existence on plug-in power are not doing so well. Production struggles, declining demand and high interest rates threaten to wipe some of them off the map. The latest is Fisker, the California-based company with big ambitions but dwindling cash.

Fisker said there are “substantial doubt” that it will have enough money to get through the year, the company said yesterday in documents filed with the Securities and Exchange Commission. As such, it has embarked on a cost-cutting spree, laying off 15 percent of employees, while seeking more investment. Fisker said he is “in discussions with an existing bondholder regarding the possibility of making an additional investment in the company.”

“We are aware that the industry has entered a turbulent and unpredictable period,” Fisker CEO Henrik Fisker said in a statement. “With that understanding and building on lessons learned in 2023, we have put in place a plan to streamline the business as we prepare for another difficult year.”

The company recently made the shift from a direct sales model, like Tesla, to franchised dealerships, which it said could lead to some cost savings. As such, employees who worked in direct sales are the most likely to be laid off. Fisker also said he would streamline his operations, including reducing his “physical footprint,” raising the possibility of him closing offices or sales locations.

Despite these headwinds, Fisker said it still expects growth, especially if 2024 proves to be a better year for electric vehicle sales than anticipated. It is in “negotiations with a large automaker for a possible transaction that could include an investment in Fisker, the joint development of one or more electric vehicle platforms and manufacturing in North America,” Fisker said.

For years, Henrik Fisker has preached the gospel of selling electric vehicles that people can afford. But the company’s asset-light business model, which relies on Magna Steyr, an Austrian contract manufacturer for Mercedes-Benz and BMW, to build the Fisker Ocean SUV, has not yet proven successful.

Last year, a short seller published an explosive report alleging that Fisker’s current cash balance was tied up in undisclosed bank guarantees in favor of Magna Steyr. He also claimed that the Ocean’s platform is based on that of a Chinese crossover also made by the contract manufacturer. Fisker denied the claim.

Furthermore, quality remains an issue. Some Ocean owners have complained that their electric vehicles are losing power and there are additional complaints of key fobs malfunctioning and hoods opening suddenly while in motion. according TechCrunch. The company says it has fixed most of these issues through software updates.

The outlook for pure-electric vehicle companies has become more difficult in the last year, as some customers are reluctant to switch to all-electric vehicles, citing label impacts and unreliable charging networks. Sales of electric vehicles continue to grow, but at a slower pace than expected. Meanwhile, hybrid vehicles are selling at a higher rate than battery electric vehicles.