(Bloomberg) — Fisker Inc. is seeking a financial lifeline as liquidity challenges put its survival in doubt, the latest sign of stress in an electric vehicle market plagued by slowing growth and questions over consumer demand.
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The company is in talks with another automaker for a capital infusion, Chief Executive Officer Henrik Fisker revealed late Thursday after his eponymous company issued a going-concern warning. Fisker also said it plans to cut 15% of its workforce while rethinking its sales strategy and is taking other steps to streamline operations.
The unidentified potential partner is “narrowed down to one large carmaker and I hope we can close this deal soon,” the CEO said in an interview.
The disclosures, along with weaker-than-expected earnings results, are the latest setback for a company that has struggled with production issues, technical glitches and criticism from short sellers. EV makers of all sizes are also grappling with an industrywide slowdown in sales growth as consumer demand wanes.
Fisker’s shares plunged 39% to 44 cents as of 8:18 a.m. Friday before regular trading in New York. The stock fell 76% last year and trades well below its 2021 peak.
The headcount reduction largely impacts sales staff as the company transitions from a direct-to-consumer model to one centered on dealers, Fisker said in a statement.
The company said its current capital may not be enough to sustain it over the next 12 months without additional funds. It reported cash and equivalents of $325.5 million as of Dec. 31, well below a $502.3 million average analyst estimates compiled by Bloomberg. With the capital challenges, Fisker said, there is “substantial doubt about its ability to continue as a going concern.”
Fisker estimates it has about $500 million split between its vehicle and parts inventories, with current sales generating more cash, the CEO said.
The automaker recorded $200.1 million in fourth-quarter sales, short of analyst estimates for $272.9 million.
The company projected deliveries of between 20,000 and 22,000 EVs this year. It delivered 4,929 for all of 2023.
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