Fisker, the California-based electric vehicle startup known for its Ocean SUV, reported last year it built over 10,000 cars but delivered less than half due to struggles with its direct sales approach, as reported by Reuters.
The company also revealed that the undelivered cars have a value of about $290 million and have mostly been paid for by customers. Out of the 10,000 cars, approximately 4,700 Ocean SUVs were successfully delivered. Fisker plans to clear the remaining inventory in the first quarter of 2024 as it transitions to a dealer-partner model.
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Direct sales failed for Fisker as inventory piled up in 2023
Fisker failed to deliver more than half the cars it built last year. The automaker said it plans on emptying the inventory by the end of the first quarter in 2024 with help from dealers, in addition to the direct sales approach it used until now.
This is a setback for the EV startup, which manufactures its vehicles under contract in Austria. In response to the challenges, the Henrik Fisker-led automaker reduced production output in December to prioritize liquidity and made several adjustments to its production guidance throughout 2023.
Fisker initially aimed to produce nearly 42,400 vehicles in 2023 but later adjusted the target to 32,000, then 20,000, then 13,000, ultimately ending the year with just over 10,000 units built. On a positive note, the startup noted that over 100 dealers in the United States, Canada, and Europe have shown interest in selling Fisker-branded vehicles. However, it remains uncertain how many of them will become official dealers.
It is important to mention that the company intends to sell cars through both dealers and the direct sales approach. In early 2024, Fisker’s CEO told Automotive News that the decision to offer dealer franchises is based partly on the company’s speed of expansion.
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“In this current situation, with high interest rates, [expensive] real estate, and getting people trained, I think we just went that route because everyone does when you are a startup,” said Fisker. “I went to my accounting department and asked what is the cost of selling a car? We decided we would rather give that money to a dealer so that we could expand faster,” he added for Automotive News.
To accelerate its dealer franchise experiment, the California startup is planning to host dealers at its headquarters in Manhattan Beach next week, and several executives will attend the National Automobile Dealers Association (NADA) show in early February to persuade dealers to sell Fisker electric vehicles.