EV maker Fisker cuts output forecast on supply chain woes; shares slide
11:49 am Friday, August 04th, 2023
By Akash Sriram and Abhirup Roy
(Reuters) -Fisker Inc shares fell nearly 9% on Friday after supply chain issues forced a cut in its annual production target, taking the shine off its smaller-than-expected quarterly loss and the first revenue from deliveries of its electric sport utility vehicles.
The company now expects to produce between 20,000 and 23,000 vehicles in 2023, down from 32,000 to 36,000 units projected in May. It blamed the cut on a key supplier that needed more time to lift capacity to meet its schedule in the back half of 2023.
Even as suppliers recovered from a “COVID hangover” to keep pace with Fisker’s production ramp-up, one key supplier of a complicated part, which needs specific skilled labor, is taking longer than expected, Chief Executive Henrik Fisker told Reuters.
“End of August, we believe this problem should be solved,” he said, adding that Fisker would be able to produce 6,000 vehicles a month later this year.
Fisker also raised its annual expenses projection to between $565 million and $640 million from $535 million to $610 million on higher selling, general and administrative costs.
Electric-vehicle startups have faced supply chain issues in the past year as industry suppliers prioritize larger EV makers with proven production capacity and demand.
Shares of Nikola also sank 13% on Friday after it named its fourth CEO in as many years in a bid to navigate a host of challenges including depleting cash reserves, supply chain constraints and a pivot to hydrogen fuel cell technology.
In July, Fisker said its production totaled 1,022 Ocean SUVs in the second quarter, missing its target of 1,400 to 1,700 units due to a shortage of components.
But the California-based company posted its first quarterly revenue from sales on Friday as the electric SUV maker kicked off deliveries in Europe and the United States.
Analysts at Raymond James said in a note while premium versions of its Ocean SUVs were being prioritized now, Fisker’s long-term margin profile remained a “question mark” as the cars, made by the Austrian unit of Canadian auto parts maker Magna International, do not qualify for the $7,500 federal tax credit in the United States.
The company on Thursday unveiled a $45,400 pickup, Alaska, and a $29,900 small SUV, Pear, that will be manufactured in the U.S. in 2025 and qualify for the subsidies.
Revenue came in at $825,000 in the second quarter, while the loss totaled 25 cents per share, compared with analysts’ expectation for a loss of 28 cents.
Analysts expect the company to record an operating profit in the fourth quarter, according to Refinitiv data.
(Reporting by Akash Sriram in Bengaluru; Editing by Sriraj Kalluvila, Anil D’Silva and Nick Zieminski)
