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Life Is About Second Chances, And The Market Is Too…Sometimes

by
Arun Mehra
Quantfury Marketing Team
Fisker Inc - Life Is About Second Chances, And The Market Is Too…Sometimes

Fisker Inc (NYSE:FSR) delivered its first car this June 2023, almost three years after the company went public, making Fisker the longest publicly traded car company in the world without actually having delivered a car. The origin story dates back to over 10 years ago, when Fisker first started producing EVs, which to a surprise can still be found being driven around by a small group of Fisker enthusiasts. 

So, what happened to the original, Fisker, and will this new run be different than the last?

Henrik Fisker originally founded Fisker Automotive – an EV company, back in 2007 – though it only lasted till declaring bankruptcy in 2013. It sold 2000 units before its supplier for batteries A123 systems initially announced bankruptcy, proceeding which business operations came to a standstill for Fisker Automotive. Fortunately, Henrik was able to retain the Fisker logo and trademark as he departed with Fisker Automotive being bought by Wanxiang Group, which he later used to re-establish Fisker Inc.

Henrik, to his credit, has an astonishing track record: designing the Aston Martin DB9, V8 Vantage, BMW Z8 and even helping with initial designs of the Tesla Model S as a consultant (after starting Fisker Automotive, he was even sued by Elon Musk).

Vanguard Group, Inc (FTSE:VGK) and Blackrock Inc (NYSE:BLK), who are the top two institutional holders of Tesla are also currently in the top three investors of the new Fisker Inc, with Fifthdelta Ltd at 9.47%, Vanguard at 7.49% and Blackrock at 6.26%. Interestingly, Fisker Inc is being financially assisted by the two largest asset management firms – could it be that after failing to succeed with his last dish, Fisker Automotive, Henrik might become a master chef with his current dish, Fisker Inc?

Fisker Inc was able to go public in October 2020 through a SPAC (special purpose acquisition company) called Spartan Energy Acquisition Corp. Spartan being backed by Apollo Global Management (NYSE: APO). Geoffrey Strong, Spartan CEO, believed in Henrik’s vision,“we are excited to work with Fisker to help achieve its vision of attainable electric transportation,” as Spartan and Apollo have a strong commitment to sustainability and ESG (Environmental, Social, and Governance). 

When pressed on why Fisker Inc has a chance now, in comparison to his last unsuccessful attempt, the Danish replied “lessons learned.” Unveiling that he has found the best recipe this time around for success, by asserting that Fisker has shifted from selling the initial risky sedan to an affordable SUV, which will give them access to volume and “a long-term business where you can actually make money.” Additionally, Henrik clarifies, the difference now from their past is they have the ability to increase manufacturing and delivery of vehicles. He says, “we have a contract manufacturer,” Magna Steyr, the manufacturer that gives them the ability to stay asset-light on their feet, instead of being heavy-footed like competitors who have to build their own factories, and carry the weight of inefficiencies for ramp-ups and downtimes. This model, Fisker believes, differentiates them from rivals Lucid, Rivian, and others.

Fisker also asserts, “because of our business model, we’re making money on the first cars we ship.” On the financial side of things, Henrik believes they’ll be profiting right away this year, giving a guidance of 8% -12% profit margins, as co-founder, CFO, COO, and wife Dr. Geeta Gupta-Fisker predicts they might even exceed these forecasts. Keep in mind that Tesla did not report profits in its first year of deliveries, 2008, or even several years after until its first profitable quarter, Q1 2013. In contrast Henrik has affirmed, “We can make money, as we are.” Furthermore, in terms of product he states, “our battery technology will be a big differentiator” as “we are targeting to get the longest range in our segment.

Last July, 2022, Fisker also swiped BMW executive Alpay Uguz as Fisker’s Vice President of Global Manufacturing to work directly with Henrik. Alpay was previously General Manager for the assembly for BMW’s X5, X6, X7 and Motorsport, with over 28 years of global automotive experience in several senior roles.

Fisker is coming back in a high-traffic market, where Tesla has 62% share of the US EV market in 2022. Not many car companies get a second chance. Though, in life we know that there are outliers – Even Henry Ford failed with his first company called Detroit Automobile company which was founded in 1899, but dissolved in 1901. He forged ahead and re-established the Ford Motor Company in 1903, and didn’t receive its first significant success till 1908 with the introduction of Model T. As with Ford, in life, there can be second chances and could that be possible in the EV market as well? Will Henrik Fisker’s second serve become an ace or be a double fault?

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