Fisker (FSR) stock falls after failing to make an interest payment, pauses EV production
EV startup Fisker (FSR) is pausing EV production for six weeks as its financial struggles worsen. Fisker looks to get its finances in order after failing to make an interest payment. The EV maker did get a commitment for up to $150 million in financing, but will it be enough?
Fisker is halting production as EV woes worsen
Fisker reiterated there is “substantial doubt” in its ability to continue operations after missing an interest payment.
According to an SEC filing on Monday, Fisker is pausing EV production for six weeks, starting immediately. The move is to “align inventory levels and progress strategic and financing initiatives.”
The EV startup was unable to file its annual report (10-K) due on March 15, putting it in default under its convertible notes due in 2025. Because of this, investors retain the right to convert the payable amount. The investors waived the right on Monday as Fisker works to file the report.
In addition, Fisker failed to make an interest payment of $8.4 million on March 15, 2024. The company has a 30-day grace period to make the payment before it goes into default.
Fisker said it “elected not to make the interest payment,” even though it currently has the liquidity to do so, as it looks to improve its financial situation.
The EV startup cash and equivalents dwindled to just $120.9 million (as of March 15, 2024) after making “significant payments” to suppliers. That’s down from $736.5 million at the end of 2022 and $325.5 million at the end of 2023.
Substantial doubt in its ability to continue
As of December 31, 2023, Fisker’s accounts payable were $182 million. However, Fisker expects more cash will be needed to pay debt and scale EV production.
Fisker will need to raise additional debt (or equity financing), partner with an OEM, or generate cash from vehicle sales to continue operations.
Fisker continues to seek funding through equity raises or partnering with an OEM. Earlier this month, reports suggested Fisker and Nissan were in “advanced talks” that could give the EV maker a financial lifeline (and an electric pickup). However, Nissan has since partnered with rival Honda.
The company said it is “continuing negotiations with a large automaker” that could include an investment, joint EV platform development, and North American manufacturing.
Fisker did get a financing commitment from an existing investor worth up to $150 million, but that won’t be enough to fund operations long-term.
After producing zero vehicles in January, Fisker built about 1,000 from February 1 to March 15. The company sold about 1,300 cars in the first two months of 2024.
Following the news, Fisker’s (FSR) stock is down over 11%. The company is facing a delisting from the NYSE exchange, with its stock price well below the required minimum of $1.00 per share. Fisker shares are currently around 0.115 per share, down 97% over the past year.
Fisker’s current vehicle inventory includes:
- North America: 1,168 at parts, 11 in transit, 180 at sea, 2,140 in storage, and 171 produced but not delivered.
- EU: 131 at port, 5 in transit, 72 at sea, 739 in storage, and 105 produced and undelivered.
- Work-in-progress vehicles include 175 in North America and another 126 in the EU.
Electrek’s Take
Fisker’s journey so far has been anything but easy, but their ability to continue just got even more challenging. After failing to miss an interest payment, Fisker is pausing EV production.
It’s already struggling to make ends meet, and now it’s halting its primary revenue source. Fisker already has a ton of convertible notes ($1.2 billion) issued that will need to be paid back.
Without significant financial backing, likely from an OEM, it will be nearly impossible for Fisker to repay them.
To make matters worse, Fiker is likely to be delisted from the NYSE, making raising equity even harder.
What do you guys think? Can Fisker pull through? Let us know what you think in the comments.
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EV sales kept up their momentum in December 2024, with incentives playing a big role, according to the latest Cox Automotive’s Kelley Blue Book report.
December’s strong EV sales saw an average transaction price (ATP) of $55,544, which helped push the industry-wide ATP higher, according to Kelley Blue Book. The December ATP for an EV was higher year-over-year by 0.8%, slightly below the industry average, and higher month-over-month by 1.1%. Tesla ATPs were higher year-over-year by 10.5%.
Incentives for EVs remained elevated in December, although they were slightly lower month-over-month at 14.3% of ATP, down from 14.7% in November.
EV incentives were higher by an impressive 41% year-over-year and have been above 12% of ATP for six consecutive months. Strong sales incentives, which averaged more than $6,700 per sale in 2024, were one reason EV sales surpassed 1.3 million units last year, according to Cox Automotive, a new record for volume and share.
(My colleague Jameson Dow reported yesterday, “In 2024, the world sold 3.5 million more EVs than it did in the previous year … This increase is larger than the 3.2 million increase in EV sales from the previous year – meaning that EV sales aren’t just up, but that the rate of growth is itself increasing.”)
Kelley Blue Book estimated that in December, approximately 84,000 vehicles – or 5.6% of total sales – transacted at prices higher than $80,000 – the highest volume ever. KBB lumps gas cars and EVs together into this luxury vehicle category, so this is where Tesla Cybertruck is slotted.
However, Tesla bundles sales figures of Cybertruck with Model S, Model X, and Tesla Semi(!) into a category it calls “other models,” so we don’t know for sure exactly how many Cybertrucks Tesla sold in Q4, much less in December. However, Electrek‘s Fred Lambert estimates between 9,000 and 12,000 Cybertrucks were sold in Q4, and that’s not a stellar sales figure.
What will January bring when it comes to EV ATPs? What about tax credits? Check back in a month and I’ll fill you in.
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Tesla is now claiming that Cybertruck was the ‘best-selling electric pickup in US’ last year despite not even reporting the number of deliveries.
There’s a lot of context needed here.
As we often highlighted, Tesla is sadly one of, if not the most, opaque automakers regarding sales reports.
Tesla doesn’t break down sales per model or even region.
For comparison, here’s Ford’s Q4 2024 sales report compared to Tesla’s:
You could argue that Tesla has fewer models than Ford, and that’s true, but Tesla’s report literally has two lines despite having six different models.
There’s no reason not to offer a complete breakdown like all other automakers other than trying to make it hard to verify the health of each vehicle program.
This has been the case with the Cybertruck. Tesla is bundling its Cybertruck deliveries with Model S, Model X, and Tesla Semi deliveries.
Despite this lack of disclosure, Tesla has been able to claim that the Cybertruck has become “the best-selling electric pickup truck” in the US in 2024:
It very well might be true. Ford disclosed 33,510 F-150 Lightning truck deliveries in the US in 2024 while most estimates are putting Cybertruck deliveries at around 40,000 units.
Those are global deliveries, but Tesla only delivered the Cybertruck in the US, Canada, and Mexico in 2024, and most of the deliveries are believed to be in the US.
However, there’s essential context needed here, as we highlighted in our recent ‘Tesla Cybertruck sales are disastrous‘ article.
First off, Tesla had a backlog of over 1 million reservations for the Cybertruck that it has been building since 2019. This led many to believe Tesla already had years of demand baked in for the truck and that production would be the constraint.
However, based on estimates, again, because Tesla refuses to disclose the data, Cybertruck deliveries were either flat or down in Q4 versus Q3 despite Tesla introducing cheaper versions of the vehicle and ramping up production.
Again, that’s after just about 40,000 deliveries.
Furthermore, with almost 11,000 deliveries in Q4 in the US, Ford more likely than not outsold Cybertruck with the F-150 Lightning in Q4.
Electrek’s Take
Tesla is in damage control here. There’s no doubt that it is having issues selling the Cybertruck.
Inventory is full of Cybertrucks and Tesla is now discounting them and offering free lifetime Supercharging.
Tesla is great at ramping up production, and it’s clear the Cybertruck is not production-constrained anymore. It is demand-constrained despite having over 1 million reservations.
Again, those reservations were made before Tesla unveiled the production version, which happened to have less range and cost significantly more.
The upcoming cheaper single motor version should help with demand, but I have serious doubts Tesla can ramp this program up to more than 100,000 units in the US.
As a reminder, Tesla installed a production capacity of 250,000 units annually and Musk said he could see Tesla selling 500,000 Cybertrucks per year.
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