The measures are temporary, according to the automaker.
Fisker, we recall, has chosen a not very common business model for the production of electric vehicles it develops by contractors on a contract basis, and for the two current models in its product range it hires different companies: Magna Steyr and Foxconn, respectively. This approach to the production of electric vehicles, on the one hand, requires less capital investment, and on the other hand, limits the company’s profit margin, because it does not have as many levers to influence the cost of production as classic vertically integrated automakers.
Fisker was forced to admit this week that it would have to suspend production of its Ocean electric crossovers for six weeks and issue $150 million in convertible bonds to bolster working capital, the Nikkei Asian Review reported.
Image source: Fisker
In January, the Austrian company Magna Steyr did not produce Ocean crossovers for Fisker at all, but from February to mid-March it managed to assemble about 1,000 electric vehicles. This did not stop Fisker from selling 1,300 electric vehicles since the beginning of this year and accumulating more than $200 million worth of finished cars in its warehouse. At the same time, about $120 million of cash and other highly liquid assets remained in the company’s accounts. On March 15, it refused to pay $8.4 million in coupon payments on bonds due 2026 to exercise a 30-day grace period to optimize its working capital structure.
Fisker representatives explained that they still hope to enter into an agreement with a strategic partner from among the major automakers. Bonds worth $150 million will be sold to one of the investment companies, which can later exchange them for Fisker shares.