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Fisker Fears it may not Survive 2024 due to Cash Shortages

Fisker Fears it may not Survive 2024 due to Cash Shortages

Even though more EVs are being sold, businesses that depend on plug-in power are not doing as well. Some of them might go out of business because of problems with production, falling demand, and high loan rates. The newest is Fisker, a company in California with big plans but not much money.

Fisker told the Securities and Exchange Commission yesterday that it has “substantial doubt” that it will have enough money to get through the year. Because of this, it has started a cost-cutting spree by firing 15% of its staff while looking for more funding. Fisker said it is “talking with an existing noteholder about the possibility of making a second investment in the company.”

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According to a statement from Fisker CEO Henrik Fisker, the business is going through a rough and uncertain time. “Now that we understand that and have learned from 2023, we have made a plan to streamline the business as we get ready for another tough year.”

The company recently switched from selling cars directly, like Tesla, to franchised shops, which it said could save money. Because of this, people who work in direct sales are most likely to be fired. Fisker also said it would streamline its operations and cut down on its “physical footprint,” which means it’s more likely that it will close some offices or stores.

However, Fisker said it still wants to grow, especially if 2024 turns out to be a better year for EV sales than expected. „Fisker is in talks with a major automaker about a possible deal that could include investment in Fisker, the joint creation of one or more electric vehicle platforms, and manufacturing in North America“, Fisker said.

Fisker’s Electric Dreams: Affordable EVs on Hold?

His goal has been to make electric vehicles (EVs) more affordable for many years. But the company’s asset-light business plan, which relies on Magna Steyr, an Austrian company that makes cars for Mercedes-Benz and BMW, to build the Fisker Ocean SUV, has not yet worked out.

A short seller put out a shocking report last year saying that Fisker’s present cash balance was stuck in bank guarantees to Magna Steyr that were not made public. It also said that the Ocean’s platform is based on that of a Chinese crossover that the contract maker also makes. Fisker said the story was false.

Quality is still a problem. TechCrunch reports that some Ocean owners have said their EVs are losing power, and there are also reports of key fobs that don’t work and hoods that open quickly while the car is moving. The business says that most of these problems have been fixed with software changes.

In the past year, things have gotten harder for pure EV companies because some customers aren’t ready to switch to fully electric cars because of the high prices and unreliable charging networks. EV sales are still going up, but not as quickly as people thought they would. At the same time, hybrid cars are moving faster than battery-electric vehicles.

About Davie Bancroft

Davie Bancroft is an accomplished author with a strong focus on investment and the tech business landscape. With extensive knowledge and experience in these fields, he provides valuable insights into emerging trends and opportunities. Davie's writings explore the intersection of technology and finance, offering practical advice for investors and entrepreneurs. His expertise and analytical approach make him a trusted resource for those seeking to navigate the dynamic world of investments and tech startups.