Struggling Fisker Pauses Production As it Gets $150 Million Lifeline

Fisker Ocean
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Electric automaker Fisker is in a super delicate situation as it attempts to balance bad press, limited cash, a big inventory, and a clear need to make some sort of transition. It’s taking a step in the right direction by securing a potential funding lifeline, but it’s going to have to make some tough choices if it wants to live long enough to use that funding.

What else? Honda is partnering with Nissan on new EVs, which connects to the Fisker news and does raise some questions about Honda’s view of Ultium. America has a 772-day supply of the BMW X2, which is mostly just a fluke, but there are still some signs that Stellantis is behind the 8-ball when it comes to sales.

And, finally, the NTSB is investigating a fatal crash with a Blue Cruise Ford Mustang Mach-E in Texas.

I’m back in the States, so let’s see if I can get this done without the four-hour time advantage.

Fisker Is In The Deep Part Of The Ocean Now

Fisker Alaska Concept 2023 1600 08

The news from Fisker has not been great as of late. The company is at risk of being delisted and had to admit, in a public filing, that it’s also at risk of no longer being able to function as a company.

And all of that was before Marques Brownlee called the Fisker Ocean tthe worst car he’s ever reviewed. I think that whole thing was a little overblown, but perception is reality, and the perception of Fisker’s viability is as important to the company as its actual vehicles (which David drove and thought was pretty good).

There’s a little update in that regard as Fisker says it’s secured $150 million in four tranches from an investor that owns 2025 convertible notes in the company (i.e. a loan that can turn into equity). It doesn’t say who this investor is, but it’s presumably an institution or a fund/individual that can spend money like an institution.

Here’s what the company is saying, specifically:

The financing is being provided by the holder of the company’s 2025-dated convertible notes and will be organized in four tranches. The financing is subject to certain conditions, including the filing of Fisker’s 2023 Form 10-K.

Fisker is also continuing negotiations with a large automaker for a potential transaction which could include an investment in Fisker, joint development of one or more electric vehicle platforms, and North America manufacturing. The closing of any transaction would be subject to satisfaction of important conditions, including completion of due diligence and negotiation and execution of appropriate definitive agreements.

Fisker has, famously, gone through a couple of CFOs as it tries to get its financial condition to make sense. The money will help, but Fisker is still sitting on a number of vehicles and, thus, is going to pause production:

The company has approximately 4,700 vehicles in its currently [sp] inventory, carried over from 2023 and including 2024 production. While it has not completed an NRV analysis for 2024, Fisker believes the completed vehicle value for its inventory as of March 15, 2024, is in excess of $200 million.

Fisker will pause production for six weeks starting the week of March 18, 2024, to align inventory levels and progress strategic and financing initiatives.

There’s going to be a lot of looking back on what happened with Fisker whether it succeeds or not. It seems like the big keys to the company’s continued existence boil down to:

  • Getting its dealership model sorted.
  • Fulfilling terms of the additional $150 million it asked for from an existing investor (who will almost certainly end up owning a lot more of the company).
  • Getting its deal with Nissan, or whomever, done.

Nissan And Honda Teaming Up On EVs

2024 Honda Prologue Elite
2024 Honda Prologue Elite

Nissan was curiously early to electric vehicles, but probably too early, and with the wrong product. Honda was late to EVs and ended up teaming up with GM to build a couple of crossovers on GM’s Ultium platform (the Honda Prologue and Acura ZDX).

The Honda is on the market, finally, but GM’s ongoing Ultium issues must weigh on the minds of Honda product planners. It’s kinda no surprise, then, that Honda and Nissan execs met last week and said, without specific details, that the two companies would work together both on electric cars and “auto intelligence technology.”

From the AP via The Detroit News:

The details of the non-binding agreement are still being worked out, both sides said. The executives said the companies will develop core technologies together, but their products will remain different.

Nissan Chief Executive Makoto Uchida stressed that speed is crucial for the companies in developing technological solutions.

“We don’t have time,” he said. “It is significant that we have reached this agreement based on a mutual understanding that Honda and Nissan face common challenges.”

What’s interesting here is that, for all the talk of the success of hybrids and of Toyota’s slow move toward electrification, the reality is that Toyota is still better positioned than both Honda and Nissan and will be rolling out more EVs sooner.

Also, wasn’t Nissan rumored to be getting the Alaska pickup from Fisker?

How is Honda supposed to be working with GM and Nissan, while Nissan works with Fisker and Honda?

The answer isn’t clear, but it probably has to do with individual markets. A pickup truck from Fisker for Nissan for North America makes sense, but not China. A crossover from GM that qualifies for tax credits in the United States makes sense for Honda here. A Nissan-Honda deal probably makes a lot of sense in China.

Why BMW Has A 772 Market Day Supply Of X2s

Car Edge Sales Data

I enjoy doing the “America has an X supply of Y car” posts using CarEdge car listing data, both from the perspective of understanding the data and also because you get some interesting flukes.

Is the BMW X2 a wildly unpopular car? Probably not. The little crossover will likely end up selling quite well here in the United States. So what gives? Last year the X2 was phased out in preparation for the car’s 2nd generation (U10) and those are now in production and being shipped.

The selling data is still based on the trailing period, wherein sales were naturally low due to the transition. My guess is the arrival of a bunch of new cars + the artificially low sales period = this weird quirk. I do wish CarEdge did a better job of clarifying why things like this happen.

All those Stellantis vehicles? That’s not a fluke.

The National Transportation Safety Board Looking Into Ford Blue Cruise Crash

The Feds are looking into a crash involving a Ford Mustang Mach-E equipped with Ford’s hands-free Blue Cruise driver assistance system that occurred earlier this year in San Antonio, Texas.

Here are the details from San Antonio’s KSAT:

The driver of an electric-powered Ford Mustang Mach-E sport utility vehicle was headed eastbound at 9:50 p.m. when he crashed into a Honda CRV.

The driver of the Mustang told police that the CRV was stopped in the middle lane with no lights on.

The driver of the CRV was taken to a hospital where he died from injuries sustained in the crash.

He was identified as Jeffrey Allen Johnson, 56, from Austin.

“NTSB is investigating this fatal crash due to its continued interest in advanced driver assistance systems and how vehicle operators interact with these technologies,” an NTSB spokesperson told KSAT. “A team of investigators from the NTSB’s Special Investigations Branch of the Office of Highway Safety will travel to San Antonio to examine the wreckage and collect information about the accident site and sequence of events leading to the collision.”

The NTSB doesn’t explicitly call out cruise in any article I’ve seen, but it does mention an “interest in advanced driver assistance systems,” which in Ford’s case is Blue Cruise.

I’m curious to see where this one goes. If the CR-V was on a poorly lit part of the highway with no lights on, even an alert driver using basic cruise control might end colliding with it. Was the Ford driver not paying attention? Was the system engaged? Why didn’t the system react?

What I’m Listening To While Writing TMD

I’ve already written about the new Kacey Musgraves album, but the song “Anime Eyes” has a reference to Japanese animator Hayao Miyazaki, the car-loving Studio Ghibli guy behind “My Neighbor Totoro” and about a million other wonderful films. This isn’t a coincidence as apparently Kacey Musgraves does a song and is a voice in a Studio Ghibli film called “Earwig and the Witch.” This song and this whole soundtrack both rule.

The Big Question

It turns out that Fisker wasn’t sitting on $500 million of cars, but rather about $200 million of cars, which makes a lot more sense. I got that one wrong last week. What’s my big bias? What mistake am I most likely to make?

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41 thoughts on “Struggling Fisker Pauses Production As it Gets $150 Million Lifeline”

  1. A 721 car supply is good for 772 days? If I’m mathing correctly that means they’re selling less than one of these per day, right?

    All those Stellantis vehicles? That’s not a fluke.

    I’ll give you the Hornet and the Grand Wagoneer, but I feel like there’s more to the 2500, Charger, and 300. The 2500 is a truck, and we all know how those sell in the US. The Charger and 300 are being phased out so I would expect their supply to be dwindling. Was there a big push to stuff the lots with them ahead of their demise?

    1. According to Good car Bad car BMW only sold 191 X2’s in 2023, although I think this is because the old model finished in the 2022 model year and the new one has only just arrived as a 2024 In 2022 they sold just over 2,600 and just under 6,600 in 2021. I think this data is a blip due to the launch of the new model. Also Car Edge base there MDS on cars sold in the last 45 days. Comparing it to annual sales produces a much lower MDS for most of the cars on the list.

      I would imagine you’re right Stellantis did fill the lots with Chargers and 300’s as I don’t think the new EV Charger goes on sale until the second half of the year and it would make sense that Dodge (especially) dealers would want more than the Hornet to sell. Jaguar announced they were doing exactly that with the F Type which is why that is on the list. Production of that car stops in May/ June and there is no replacement until next year and it’s an indirect EV replacement as well.

  2. Regarding Fisker… I hope Apple actually buys them. The Fisker Ocean is a nice looking vehicle and that ‘worst car ever’ review seems to boil down to one main issue… bad software.

    And what company is good at software?

    Apple.

    Regarding the BMW X2… I suspect the biggest issue with the X2 is the X1 on one side and the X3 on the other side.

    Personally I think the X2 is completely redundant as it’s only microscopically larger than the X1.

    In my opinion, BMW should kill off the X2, X4 and X6.

    Regarding the Big Question… OBVIOUSLY it’s because you’re a SLACKER

    https://www.memesmonkey.com/images/memesmonkey/3d/3d180b6a8fc7f8dd8b36ba9e68e6577b.jpeg

  3. I irrationally hate Nissan. I am now heavily frustrated with Honda for making this decision. It’s like your Salutatorian became friends with the High School Quarterback and they are now in charge of the student council.

  4. We might never know the terms, but it’d be super interesting to see the terms of that financing agreement. It’s such a massive risk/reward spend of $150M that, if it works out, the investor is gonna make a killing. Or at least one would think…

      1. I strongly doubt that he and his wife, the CFO of Fisker (nope nothing to see here!) will pocket another 8 figures of money, disappear for a few years, and return once this has blown over with another “revolutionary” product to pump full of vulture capital and market towards the wealthy conspicuous environmentalist crowd. There’s just no way that’s going to happen. He’s just a friendly little environment loving car designer!

        1. It’s a wholesome little family-run company! You can always trust when people from the same family are in the major leadership positions.

          “Lisa, a guy who’s got lots of ivory done lots of grifting is less likely to hurt Stampy investors than a guy whose ivory supplies ill-gotten gains are low.”

        2. This is seriously an arrangement that would cause a township to want to audit a local volunteer fire department, and is really bizarre in a publicly traded company

  6. What’s my big bias? What mistake am I most likely to make?

    I think you, like most journalists, are likely to give a company the benefit of the doubt, taking their statements at face value. Which really makes sense on these brief blurbs, since you can’t really do the deep dive to evaluate the likelihood they’re blowing smoke.

    What’s nice, though, is when we get that short blurb here, then a deeper dive full article into why it is or isn’t likely to be true or why it’s not as simple as the company line would imply. In those cases, it really feels like you’ve given us some important context right before we get into it.

  7. BMW X2s are lease machines/stretch purchases for middle class folks who want to be perceived as wealthy. Car enthusiasts and the traditional BMW crowd tend to shun them because they’re rebadged Minis and are front wheel drive based. I can’t speak for this generation necessarily but I drove a previous gen X2 M35i and was extremely unimpressed.

    I thought it was a weird combination of being hyper (as you want in a hot hatch) and ridiculously numb. It was quick in both speed and how it reacted to inputs but I just had absolutely no idea what was actually going on with the car. The brakes were an on/off switch as Ze Germans like. The steering was overboosted and completely devoid of feeling. The power was more or less all or nothing as well.

    I test drove a poverty spec 330i right after it and it was ridiculous how much better it was. Anyway, I’d venture a guess that the market for these cars is probably largely dependent on lease deals and financing…and with how fucked interest rates are the usual crowd that buys the gussied up Minis can’t really afford to buy them right now.

    I don’t think they really appeal to the six figure and up demographic. I’d imagine appeal to the folks making 70k who want everyone to think they’re doing better than they are…aka the entry level luxury crowd. I’d be willing to bet that X2s are stretch purchases for a lot of buyers. When financing is 8% APR or whatever they’re no longer vaguely affordable.

    1. I think your take is pretty accurate. Lower end non-VW German cars definitely seem geared toward buyers who are more concerned with appearances than substance. I’ll say though, as a rental the X2 was quite nice. My GF and I rented one to travel from San Diego to Vegas last summer, and getting it as a free upgrade over a RAV4 “or similar” was a welcome surprise.

      She was more excited about it than I was, so she did the driving. She enjoyed it, and I thought it was comfortable. It was nice and stable and quite going 100+ through the Mojave and got surprisingly good fuel economy.

      We enjoyed having it as a rental, but we both agreed it was a vehicle neither of us would buy.

  8. I hope Fisker makes it. From the reviews I’ve seen, it seems like it’s software rather than hardware that’s holding it back, but I know sometimes it just appears to be the software and it’s actually hardware.

    The problem all these startups have is that noone wants to be stuck with a very expensive car that noone can service if the company goes under, and once there’s a hint of trouble, sales plummet. I don’t see recovery for them from this, unless they partner with a major automaker. I do wonder if Magna somehow ends up with the rights to continue production, fixes the issues, and continues on without Fisker, or if they give them some sort of lifeline to continue production (if Magna can find a way to profit from it).

    1. What makes you want Fisker to succeed? I don’t know a ton about them, but I’d certainly rank them well behind Rivian and Lucid as my top start-up car companies I want to succeed.

      1. Fisker has put out an array of interesting products that could eventually be coming down the pipeline. The Ocean, Pear, and Alaska are head-turners and seem reasonably(ish) priced. The Pear might be a valid replacement for the “temporarily” defunct Chevrolet Volt and the Alaska looks like it’s coming for the Ford Maverick’s lunch money.

        My current takeaways on the other companies: Lucid seems comfortable in the luxury market, creating successors to the Tesla Roadster and Rivian is trying to be the Subarua of EV manufacturers…and appears to be finding the right niche, based on the reception of the R3X.

      2. I like competition and choices. These start-ups do shake up the market a bit. I want Rivian and Lucid to succeed too. Fisker seems like they made it 95% there with their vehicle and they need to work out the kinks. On the software side, it’s really no worse of a launch than some of the major manufacturer stuff lately (Hummer and Blazer EV’s come to mind).

  10. Nissan doesn’t CRUSH their electric cars. That’s the difference.

    The Leaf was the first modern mass-produced EV and remained the best-selling EV until a few years ago when the Tesla Model 3 finally took over.

    2. I don’t think very many copies of the Altra EV survive, so I wouldn’t be THAT confident saying Nissan didn’t crush EVs.

      But the Altra EV was also the first lithium-ion EV that was available to the public so they have always been doing stuff nobody else does.

      1. I think it’s funny how everyone gives Nissan and Honda a pass for doing exactly what GM did with the EV-1, with their Altra EV and EV Plus, respectively. Imagine if they had made a movie about them instead.

        1. I think they are hung up on the idea that the EV1 was the future because it looked like it was from space, and forgot the others because the EV Plus looked like a dumpy economy car and the Altra EV looked like the world’s most 1998 station wagon.

          I would argue that the Altra EV is more important than the EV1, given the tech they used, but it wasn’t splashy enough for the movie people.

    1. I was going to make the some comment. I think there are likely incentives and advantages for Honda to partner with Nissan that aren’t present for Honda partnering with GM, most notably that Nissan is much more of an equal who likely needs a partner to help spur further development of the EV platforms and systems Nissan already has. GM is a bit of a monolith relative to Honda, and from what I’ve seen of the Honda Prologue it seems like GM dictated terms on using the Ultium platform that led to a compromised, not-very-Honda vehicle.

  12. > What mistake am I most likely to make?

    I want to be snippy and say “conflating pluckiness with viability,” but you do call out that “perception is reality.” Fisker might be plucky (for some definitions of plucky), but novelty is not in itself a pathway to success.

    I’m spiteful, but not entirely mean-spirited, so I don’t want Fisker to fail, but I also don’t think they deserve to succeed. Build shitty products, win shitty prizes.

    To balance the unwarranted snippiness, I’d like to say I also really enjoy the CarEdge data roundup. It does feed my schadenfreude, it does help me build a general sense of production and purchase cycles over time, and I love the idea that certain cars and vital commodities, like if we run out of X2s, or Triscuit ore, or toilet paper, or god help us all three, we’re in deep shit.

    1. Understanding statistics is hard. Explaining statistics to the unwashed (ok, maybe sponge-bathed) masses is harder. There’s value in the simplicity of the CarEdge data, but telling the story behind those numbers is tricky to get right 100% of the time, but I’ve enjoyed reading the insights so far!

      1. ‘There are three kinds of lies: lies, damned lies, and statistics.’ – Benjamin Disraeli, although 9 out of 10 people will say it was Mark Twain.

        1. Gladstone, who was Disraeli’s parliamentary nemesis, once proclaimed “We should send all the lunatics and the Jews to the moon”. Disraeli, who was Jewish, responded “Then I shall meet you there”.

  13. Fisker should just change their corporate name to Struggling Fisker Inc. at this point, since that’s pretty much how it always appears in print

        1. Oh man, Ford double-dipping on the Lightning is confusing. I thought somehow you had already seen the succeeding generation of the current EV truck. It makes a lot more sense now that I see it was an SVT vehicle.

          1. Funny enough a buddy of mine has a 90s SVT Lightning and has been asked multiple times (usually while filling it at a gas station) if it is the new electric truck.

            1. People at gas stations aren’t too bright. For years people asked if my e36 BMW 318 convertible was new, even though it had 200k miles and the clear was peeling off the hood.

      2. I agree with your assessment of Echo and the Bunnymen. But that’s only because I’m not aware of any black metal or death metal bands from Liverpool.

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