In the United States, making cars is not easy either!
At a time when the new forces of car making in China are thriving, the new forces of car making in the United States are struggling. The latest news shows that the American electric vehicle startup FSR. US, once known as the "Apple of the automotive industry," plans to file for bankruptcy. Previously, the company issued a warning regarding its ability to continue operating.
In the secondary market, affected by the above news, Fisk's stock price plummeted by 47% before the US stock market closed on Thursday. As of Thursday's close, Fisk's stock price has fallen 51.94%. At its peak three years ago, the market value of this company once exceeded $8.8 billion, but now it is less than $100 million, a decline of 99%.
At the same time, electric vehicle companies Rivian and Lucid, known as the "Tesla Killers," are also struggling.
It is worth mentioning that on the evening of the 14th Beijing time, the United States released key data for February. The US PPI in February increased by 1.6% year-on-year, exceeding expectations by 1.2%. The previous value was revised from 0.9% to 1%. The core PPI of the United States increased by 2% year-on-year in February, which was 1.9% higher than expected and remained unchanged from the previous value. The main reason for the higher than expected PPI growth rate in February in the United States is the rise in fuel and food prices, which further indicates that inflation is still intensifying. The data shows that the path for Federal Reserve policymakers seeking greater progress in combating inflation is not smooth, which may strengthen market expectations that the Federal Reserve will not be in a hurry to cut interest rates.
Fisk's stock price plummeted
Prior to Thursday's US stock market trading, the stock price of American electric vehicle startup Fisk plummeted by 47%. As of the close of the day, Fisk's stock price fell 51.49% to $0.1549 per share, with a current market value of less than $83 million. In the five months prior to this, Fisk's stock price experienced a 95% correction.
On that day, the sharp drop in Fisk's stock price was related to a rumor of filing for bankruptcy. According to a report by The Wall Street Journal, insiders have revealed that Fisk, who is in trouble, has hired financial firms FTI Consulting and Davis Polk Law Firm to prepare for a potential bankruptcy filing.
The above-mentioned insiders stated that Fisk has recently warned that it may run out of cash this year. This car company reported last month that its sales last year were $273 million and its debt exceeded $1 billion. Last month, it issued a going concern warning, stating that there were "significant doubts" about its ability to maintain operations.
The founder of Fisk is Henrik Fisk, a well-known automotive designer who worked for well-known car companies such as BMW and Ford for over a decade before starting his own car manufacturing. He led the design of a series of famous cars such as the BMW Z8, Aston Martin DB9, V8 Vantage, and also participated in the preliminary design of the Tesla Model S. In 2007, Fisker first started car manufacturing, founded a car company called Fisker Automotive, and launched its first model - the Karma extended range hybrid supercar, which won multiple design and innovation awards. Later, Fisk resigned due to internal conflicts on the board, but retained some brand rights.
After leaving, Henrik Fisker started his second business in 2016 and founded the new Fisker company, which began to pursue pure electric technology. This company is now Fisker. In July 2020, Fisk went public through a merger with Apollo Global Management's SPAC special purpose acquisition company, with a valuation close to $3 billion. In March 2021, the company's market value briefly exceeded $8.8 billion. Last month, the company received a non compliant notice from the New York Stock Exchange due to its stock price averaging below $1 for 30 consecutive trading days, which means it faces the risk of delisting due to its low stock price.
Fisk's main product is the Ocean electric SUV. As its only available model, the Ocean adopts an outsourced production method, produced by Magna at its factory in Austria, which has also produced cars for car companies such as Mercedes Benz, BMW, and Jaguar.
Recently, Fisker released its 2023 financial report, which showed that Fisker's revenue in 2023 was $273 million, compared to $340000 in the same period last year; In 2023, the company's operating loss was 417 million US dollars, compared to 530 million US dollars in the same period last year; The company's net loss was 762 million US dollars, compared to 547 million US dollars in the same period last year. In 2023, Fisk produced over 10000 Ocean cars, but the delivery volume was only about 4700.
On February 29th, Fisk issued a warning that the company may not be able to continue operating if new financing is not obtained. Subsequently, the company's stock price plummeted by 35% after the stock market closed. Fisk also announced that it will reduce its employees by about 15% and revealed that it is in talks with a large automaker regarding potential investments and joint development partnerships, but did not disclose the name of the automaker or financial details of potential transactions.
Due to high borrowing costs damaging consumer confidence, Fisk has been working hard to sell its flagship model, the Ocean electric SUV. The company stated that its current resources are "insufficient" to support its operations for the next 12 months. In addition to negotiations with large car manufacturers, Fisk is also discussing potential investments with creditors. Fisk plans to deliver 20000 to 22000 Ocean electric vehicles by 2024, which is lower than the expected 35600 vehicles. But without additional financing, the company may have to reduce Ocean's production, lower investment, reduce operational scale, and further lay off employees.
Recently, there have been rumors that Nissan is in advanced negotiations with this American electric vehicle startup regarding a potential deal. If the negotiations are successful, Nissan will invest $400 million in this company. However, as of now, there is no progress on this matter.
Other car companies are also in trouble
Rivian and Lucid are also struggling electric vehicle manufacturers. Recently, both companies have announced disappointing performance and stagnant production. Since November 2021, Rivian's market value has dropped from over $150 billion to around $10 billion, and Lucid's market value has also dropped from over $91 billion to $6 billion.
Rivian is known as the "Tesla Killer" and has received investment from well-known companies such as Amazon and Ford. The company's market value once surpassed automotive giants such as Ford, General Motors, and Volkswagen, becoming the third largest car manufacturer in the world by market value. However, the good days are not long. Due to long-term losses and repeated delays in car deliveries, the company's stock price has been declining since late November 2021, and there is still no sign of stopping the decline.
On February 21st of this year, Rivian's financial report revealed that the company achieved a revenue of 1.315 billion US dollars in the fourth quarter of last year, nearly doubling year-on-year; The net loss for the quarter was 1.521 billion US dollars, compared to a net loss of 1.723 billion US dollars in the same period last year. In 2023, the company's total revenue was $4.434 billion, a year-on-year increase of 167%, but a net loss of up to $5.432 billion. In its financial report, Rivian announced that it will lay off approximately 10% of its workforce to cope with the challenging electric vehicle market situation.
According to financial report data, Rivian produced 17500 vehicles and delivered 14000 vehicles in the fourth quarter of last year; The total production for the year 2023 was 57200 vehicles, with a delivery of 50100 vehicles. However, the company's production outlook for 2024 is significantly lower than market expectations. Rivian expects its production to be 57000 vehicles in 2024, which is lower than analyst expectations of approximately 65000 vehicles. Rivian CEO RJ Scenario stated that the severe macroeconomic situation, including high interest rates leading to rising car prices and weak demand for electric vehicles, is the underlying reason for the weak production outlook. On the second and third days after the financial report was released, Rivian's stock price fell by 25.6% and 12.05% respectively.
Recently, a netizen asked Tesla CEO Musk online: How do you view the situation of Rivian, a new automotive powerhouse, and whether it can survive? Musk replied that according to the current trajectory, Rivian will go bankrupt in about six quarters, and added that "perhaps this trajectory will change, but so far it has not.".
Data shows that Rivian's cash reserves on the books have decreased from a high of $18.1 billion at the beginning of 2022 to $7.9 billion at the end of 2023, using up $10.2 billion over two years, with an average quarterly decrease of $1.275 billion. Based on this trend, the remaining $7.9 billion is just enough for six quarters.
Lucid, another electric vehicle company known as the "Tesla Killer," is also not very optimistic. Recently, Lucid's financial report revealed that the company's losses are expanding. In the fourth quarter of 2023, Lucid suffered a net loss of $654 million, compared to a loss of $473 million in the same period last year; The quarterly revenue was 157 million US dollars, a year-on-year decrease of about 39%. In 2023, Lucid suffered a net loss of 2.83 billion US dollars, an increase of 117% year-on-year. Lucid expects to produce 9000 cars this year, far below analyst expectations of 14000. Last year, the company's production was 8428 vehicles, and based on a net loss of $2.83 billion, Lucid incurred a loss of approximately $336000 for every car produced last year.