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    Home»Technology»Fisker is on target to launch the Ocean electric SUV in November 2022
    Technology

    Fisker is on target to launch the Ocean electric SUV in November 2022

    SaykatBy SaykatOctober 15, 2022No Comments4 Mins Read
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    Fisker provided an upbeat forecast on the ramp-up of its electric automaking business during Wednesday’s third-quarter earnings call, highlighting its manufacturing partnership with Foxconn, a battery supply agreement with Chinese battery giant CATL secured and its on-track production for the company’s debut Ocean SUV.

    The company confirmed that it will start production of the Ocean in November 2022, in partnership with automotive contract manufacturer Magna Steyr, and will produce two vehicles a day by the first quarter of next year, CEO Henrik Fisker said during an investor call Wednesday. Deliveries are on track to begin in the U.S. and Europe in late 2022.

    To meet these deadlines, Fisker is ramping up its pace of spending. While its general and administrative expenses rose a modest few million dollars to $10.3 million in the most recent quarter (up from $7.9 million in the three months concluded June 30, 2021), other expenses rose more rapidly. The critical research and development line item from Fisker — recall that the company is still getting ready to build and sell cars, so it’s in R&D mode today — grew by more than 100% from its Q2 2021 tally of $45.3 million to $99.3 million in the most recent quarter. The increase was the result of increasing the company’s workforce, and spending on prototype development, executives said.

    That incredible bounce to R&D spend helps explain why Fisker added so much cash to its accounts in recent weeks; it needs a boatload of cash to get its vehicles into the market, and into the hands of their eventual drivers.

    Fisker and CATL
    The big news is Fisker’s battery deal with CATL, for which the Chinese company will supply an initial annual capacity of over 5 gigawatt-hours through 2025, with an option to increase volumes. The Fisker Ocean will launch with two different battery packs, which will go into prototypes next year: the base pack will use a lithium iron phosphate (LFP) chemistry that’s lower cost, but less energy dense; the second battery, a nickel-manganese-cobalt (NMC), will have higher energy density with greater range, but will have a commensurate cost increase to go along with it.

    “What this allows us to do is get the world’s longest range in our segment for an SUV in our price class,” Fisker said. More details on the range of the two battery packs will be revealed at the LA Auto Show next week, he added. LFP, an older battery chemistry, has become a popular lower-cost option amongst companies, including Tesla, which said it would use the chemistry in all standard Model 3 vehicles across global markets.

    “Why would we be ahead of the competition?” he said. “We chose all this technology this year. So when you get a Fisker Ocean 12 months from now, your technology is the newest of the newest. If you buy any other car next year, most likely that technology was chosen three years ago.”

    The company is also in the middle of setting up a Chinese entity to take reservations from customers in that country, though that likely won’t be complete before the beginning of next year, Fisker said. Around 80-85% of Fisker’s current reservations come from the U.S.

    Earnings results
    Now, onto the earnings. Obviously, as a pre-revenue company, what matters on Fisker’s earnings is a little different from our usual financial fare. Shares of Fisker are up just over 1% in after-hours trading after the electric vehicle company announced its third-quarter performance. As expected, the company’s revenues were more than light, and Fisker lost money.

    The market had expected Fisker to report a per-share loss of $0.35. The company’s $0.37 loss per share was worth some $109.8 million, in net loss terms. Fisker generated a bare $15,000 in revenue during the period, a figure that led to a $1,000 net loss.

    Fisker was also pipped to detail a recent bond offering that brought its cash supply up to $1.40 billion, a huge fain from its preceding tally of $962 million, a figure shared at the end of its June 30, 2021 quarter. Fisker sold $667.5 million worth of convertible notes yielding 2.5%, helping it sell its coffers ahead of eventual vehicle production.

    While Fisker remains pre-revenue today, investors expect that to rapidly change. From a faint dusting of top-line in 2021, street analysts anticipate that the company will soar to $264.2 million in revenues during the 2022 period, per Yahoo Finance data. All that cash that Fisker just raised will come in handy when it has to meet those essentially infinitely steeper revenue demands from public-market investors.

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