Fisker, the Oldest New Kid on the EV Block

Fisker Inc (NYSE: FSR)

Back in 2012, Tesla and Fisker were two fresh-faced EV car companies bursting onto the scene. However, just like the film Highlander, there could be only one. In the end Tesla went on to EV dominance and Fisker lasted about a year before filing for bankruptcy. The Federal Government lost about $139 million as a result of the bankruptcy. Now California-based Fisker is back at it and began trading last Friday.

Fisker Then

Fisker launched their first EV called the “Karma.” The car was a lot sportier and more stylish when compared to the Model S. It looked like a 4-door exotic. The car boasted over 400HP and sold for around $100,000 to $120,000.

Similar to the Chevy Volt, the Karma had a four-cylinder gasoline engine that would change the battery. This gave the car its range-extending capabilities. However, the company suspended production in 2012 following the bankruptcy of its battery supplier, A123.

Battery supply issues and sluggish sales doomed the company and they filed for bankruptcy themselves a little after a year of production. In all, about 2,500 Karma vehicles were manufactured. Still stylish, the car sells used for around $40,000.

In 2014, the company’s assets were sold to Wanxiang Group and renamed the company Karma Automotive. Henrik Fisker himself, retained the Fisker trademarks and the Fisker brand.

Fisker Now

Henrik Fisker began to make waves in August of 2018 when the company introduced the EMotion prototype. The company indicated that they were just a few months away from powering the sedan with a scalable solid-state battery. The battery was intended to be an advancement in battery technology form the liquid state lithium ion batteries that power everything from your phone to Tesla’s. The technology was supposed to charge quickly, not degrade over time and be able to produce output to power a vehicle.

Two years later and the EMotion still hasn’t been produced. Why? Because the solid-state battery technology still isn’t ready. Another battery issue plaguing a Fisker production vehicle.

In March of 2019, as the company was announcing the delays to the EMotion, they discussed the production of an SUV. Some of the details that provided were an 80kWh battery and a 300-mile range.

Fisker Going Public

In July of this year, Fisker announced that they were going public through a SPAC deal. This is a path that companies like Nikola Corporation took in 2019 to become publicly traded. The merger combined Fisker with a blank-check company backed by Apollo Global Management, a private equity company, called Spartan Energy Acquisition Corp.

The combined company leaves Fisker with about $1 billion in cash and no debt. The capital infusion is expected to bring the SUV concept introduced in 2019 to life in 2022. The SUV will is going to be named Ocean but current plans will have the car use Lithium Ion battery technology.

If you want to learn more about SPACs, here’s a post I did on them.

Fisker Publicly Traded

 On Friday of last week, Fisker began to trade under its new symbol FSR. The share price opened trading at $9.25 and closed at $10.14. Today, the stock traded as much as 23% higher on the session before falling back to close $11.54% higher on the session.

Conclusion

The re-introduction of Fisker to the market is an interesting proposition. The company appears to be well funded but is plagued with a history of production issues. Is this time different? Only time will tell, but with no car in production until 2022, it’s going to take time to find out.

As you consider the earnings announced from Chinese EV car makers like Nio Inc (NYSE: NIO) and Xpeng Inc (NYSE: XPEV) for last quarter, you can see the potential excitement around a new EV car company like FSR. However, any investor will have to be willing to accept the potential failure and long-term prospects of this company.

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