Electric-vehicle start-up Fisker is on track to hit its current delivery guidance for the year. Investors are pleased.
Production Update: 5,000 Ocean SUVs Made and Daily Output Increasing
On Tuesday, Fisker (FSR) announced that it has successfully manufactured approximately 5,000 Ocean SUVs in collaboration with manufacturing partner Magna International (MGA). Notably, production is steadily increasing and is now reaching 300 units per day.
As of September 7, Fisker had already produced 3,123 units. Over the past 19 days, an additional 1,900 units, averaging around 100 per day, have been manufactured.
Projected Production Numbers for the Fourth Quarter and Full-Year
Although the ramp-up is still ongoing, Fisker’s current pace of 300 units per day suggests a potential production of about 23,000 units in the fourth quarter, assuming operations running six days a week. This would bring the full-year production estimate to approximately 28,000 units. In August, Fisker had initially planned to produce 20,000 to 23,000 units this year—a range that has now been revised upwards. Previously, Fisker had forecasted a production target of 32,000 to 36,000 units for 2023.
The revised projections now seem feasible and promising.
Positive Market Response and Stock Performance
Following this news, Fisker’s stock price has risen by approximately 3.4% to $5.49 in premarket Tuesday trading. In comparison, the S&P 500 and Nasdaq Composite futures are both down by about 0.5%.
Manufacturing Partnership with Magna International
As Fisker continues its production efforts, it is important to note that the company does not have its own manufacturing plant. Instead, Fisker has collaborated with Magna International, an experienced contract manufacturer with a plant based in Austria, to build the Ocean SUVs. This strategic partnership has helped minimize Fisker’s capital requirements. Since the beginning of 2021, Fisker has utilized approximately $1.2 billion for its business operations—a significantly smaller amount when compared to Rivian Automotive’s expenditure of approximately $13.5 billion over the same period.
To date, Rivian has produced around 50,000 units, approximately ten times more than Fisker.
Next Steps: Scaling Up and Market Challenges
Fisker’s prudent strategy has allowed for effective cash preservation thus far. Now, the focus lies on whether the company can successfully scale up its production in line with market demands.
Over the past 12 months, Fisker stock has experienced a decline of approximately 33%. Factors such as rising interest rates and lower-than-expected sales growth have dampened investor enthusiasm.
