India’s Fisker is finally starting production of its incredible electric SUV

The SUV accelerates from zero to 60 miles per hour in just 3.6 seconds and has an estimated range of 350 miles (563 kilometers), a little more than Tesla Inc’s Model Y. Inside hero feature: A 17.1-inch center touchscreen that rotates at the push of a button for more enjoyable browsing of YouTube videos and streaming services.

The shows and movies on Ocean’s high-resolution screens can hardly match the amount of drama Henrik Fisker has staged in his 33-year career. There have been exhilarating highs — he is known for designing beautiful BMW and Aston Martin sports cars — and there have been lows, none more so than when his first plug-in venture, Fisker Automotive, was launched nine years ago this month. Filing for bankruptcy is even more disappointing.

This blemish on his résumé made it difficult, at least for a few years, to fund subsequent auto operations. Before the Covid-19 outbreak was declared a pandemic in March 2020, he and his wife and co-founder Geeta Gupta-Fisker were forced to stop collecting cash compensation from Fisker and furloughed employees.

Then, the funny thing happened: VCs with little or no revenue started making big waves by merging with SPACs and going public.

Fisker agreed to merge with a SPAC sponsored by private-equity giant Apollo Global Management Inc., a month after electric-truck startup Nikola Corp. debuted and briefly surpassed the valuation of Ford Motor Co. dollars in cash. The Fiskers family used this funding and big-name backing to sign deals with Magna Steyr, the most prestigious contract manufacturer in the automotive industry, and Contemporary Amperex Technology Co. Limited, the world’s largest battery company.

The partnership with Magna Steyr – which will see Oceans produced in Graz, Austria alongside the BMW Z4 and Toyota Supra roadster – lays the groundwork for building a supply chain from the ground up amid unprecedented disruption. Its parent company, Magna International Inc., makes components ranging from stamped metal structures to advanced driver-assistance systems. Fisker also prepaid for CATL’s dedicated battery line to lock in supply.

“We’ve been able to avoid mistakes that are only inevitable when you know them, and I know them,” Fisk said in an interview. “The experience of doing it once before is invaluable.”

Investors see Fisker Corp. as a wait-and-see stock even after Ocean garnered more than 63,000 reservations. Nikola, whose founder was convicted of fraud last month, and other post-SPAC auto companies burned. Lucid Group Inc., electric car maker Rivian Startups such as Automotive Inc., which had an initial public offering a year ago, have also been plagued by shortages, forcing their factories to shut down at times for days.

Fisker got off to a slow start, delivering just 15 cars to Magna’s commercial fleet by the end of the year. It predicts more than 300 oceans will be produced in the first quarter, more than 8,000 in the second quarter of next year, and the second half of the year will account for about 80% of the total for the year. If all goes according to plan, 42,400 cars will be built.

Magna is positioning Fisker to ramp up production more smoothly than other EV startups, Gupta-Fisker, the company’s chief operating officer and chief financial officer, told reporters last week.

“Suppliers want to go to safe havens. They want to go to manufacturers who haven’t canceled — they’re in line,” she said. “We don’t need to learn manufacturing. We don’t need to teach 1,000 people how to assemble a car. That risk has been addressed”

Another factor in the company’s favour: Gupta-Fisker says its first car will cost the same to produce as the 40,000th, so Fisker won’t incur the cost of an underutilized plant for the first few quarters of Ocean production. Those costs weighed on earnings results for Lucid and Rivian, both of which posted heavy quarterly losses.

As for the product, early impressions of the Ocean are mostly promising, albeit cautiously (Motor Trend added a question to the title of its first drive story: “Has Henrik finally made it?”) The CEO took this Think calmly.

“I’m not here to prove something to people who don’t believe in me,” Fisk said. “I’m here to deliver a product that I think has the potential to be something that people actually love.”

First published date: Nov 18, 2022 at 09:29 AM CST