When Henrik Fisker talks about his company’s plans for this year, like possibly sharing the platform for the new Fisker Ocean electric crossover with other automakers or unveiling the Fisker Ronin EV grand tourer, he tends to be circumspect. The design mogul turned EV startup founder seems reluctant to make the bombastic promises that have worked against other new automotive ventures.
But when he is asked about the short-seller report that claimed Fisker Inc.’s finances are largely tied up in a deal with its contract factory, he does not mince words.
“The guy is a simple crook,” Fisker said in a recent interview with The Verge. “You can quote me on that… I was surprised that anybody even printed that stuff.”
“The guy is a simple crook”
At the beginning of December, short seller Fuzzy Panda Research released a report alleging that Fisker Inc.’s current cash balance is tied up in undisclosed bank guarantees to its Austrian factory partner, Magna Steyr. It also claimed the Ocean’s platform is based on that of a Chinese crossover also made by Magna Steyr.
The claim was met with a forceful denial from Fisker Inc. It also precipitated a 5 percent drop in shares of the company, which went public by merging with a special purpose acquisition company in 2020. (Fuzzy Panda Research did not respond to a request for comment from The Verge.)
This year will end amid an uneasy time for many EV and mobility startups. Investments in those firms are beginning to cool off, a trend that is likely to continue into 2023 amid an uncertain economy and car market. Additionally, Fuzzy Panda’s report is not the first time an activist short-seller firm has gone after an automotive startup. In 2020, a report from Hindenburg Research threw EV and hydrogen semi truck startup Nikola into chaos, ultimately leading to the conviction of its founder on fraud charges.
All of this is a moment Fisker seems eager to move past so he can get some cars into the hands of his customers. Known for his design work on the BMW Z8 and various Aston Martins and leading Ford’s global advanced design studio, this is his second go as a car company CEO. His first venture, Fisker Automotive, which produced the Karma plug-in hybrid sedan, threw in the towel when its battery supplier went bankrupt. (It’s complicated: Fisker Inc. has the same logo as the original Fisker Automotive, but that company was reborn as Chinese-owned Karma Automotive, which kept the Karma going as the Karma Revero.)
Fisker seems eager to move on so he can get some cars into the hands of his customers
This year will be a make-or-break one for both Fisker and the company that bears his name. It will test Fisker Inc.’s “asset-light” approach to building EVs: outsourcing production to third-party manufacturers across the globe while Fisker Inc. itself focuses on design, engineering, and customer service.
It’s a fairly unique approach for any car company that eventually seeks to be a big, global, high-volume player. Contract manufacturers are often used to make special models or to augment production capacity when needed. But most automakers want to own their production process; Rivian, for example, produces the R1T and R1S at its plant in Normal, Illinois, and is building an even bigger plant in Georgia.
For now, at least, Fisker Inc. will depend on outside companies, with each model produced at a different location.
That starts with the production of the Fisker Ocean, a roughly Tesla Model Y-size electric crossover with an estimated 350-mile range. The Ocean will be built by Magna Steyr, which has a long track record of supplementing manufacturing capacity for stalwarts like the BMW 5 Series sedan as well as lower-volume specialty cars like the BMW Z4 and Toyota Supra.
Production of the Ocean started in small batches at Magna Steyr in November. The crossover has already garnered early positive reviews when tested in “85 percent done” form by journalists this fall. If things go according to plan, Magna Steyr will build 300 Ocean crossovers in Q1 2023 before ramping up to a total of 42,000 by the year’s end.
Earlier this year, Fisker faced a choice between delaying production to correct software issues related to its driver-assistance system or going ahead and fixing the software later on. It chose the latter. Some early Ocean models will receive over-the-air updates early next year.
The Ocean will then join an increasingly crowded field of higher-range EV crossovers, competing against the Tesla Model Y, the Volkswagen ID.4, the Cadillac Lyriq, and more. The launch spec Ocean One model is aiming for a top-of-the-class 350 miles of range and is priced at $68,999; later, the base Ocean Sport will launch at $37,499 with 250 miles of range. Several Ocean trims are already sold out for 2023.
Besides the range, Fisker says the Ocean has a design edge over competitors with features like a rotating 17.1-inch touchscreen and “California Mode,” which opens all the windows and the optional SolarSky roof. A significant amount of the interior is made from recycled plastic as well.
Next up is the Fisker PEAR, or “Personal Electric Automotive Revolution,” a smaller EV Fisker Inc. claims will launch with a remarkably competitive price of $29,900. That’s before any tax incentives, which it does stand to receive because it’s due to be built at Foxconn’s plant in Lordstown, Ohio.
If Fisker Inc. pulls this off, it will be one of the very few players even bothering with more affordable EVs in the current market. Most automakers are going for luxury buyers to offset the high R&D and manufacturing costs involved with battery power.
But this is where Fisker says he sees an opening. “I think the biggest opportunity is actually in the more affordable segment right now,” he said. “We need everyone to own an EV. And everyone cannot afford an $80,000 electric SUV or a $120,000 electric sedan, no matter how cool they are.”
The company thinks it can meet that target by dramatically reducing the number of parts involved in the car, even by the more austere standards set by the Tesla Model 3’s interior.
After that, there’s the Fisker Ronin, a callback to Fisker’s own sports car roots. Named after the car chase-heavy John Frankenheimer action classic, Fisker says the Ronin will be a four-door convertible grand tourer EV targeting a range of more than 550 miles and a price tag of around $200,000. The Ronin would be one of the only EV convertibles on the market; the upcoming Polestar 6 is about the only similar thing in the pipeline.
But even without announcements of cars powered by rocket thrusters, it’s a very aspirational lineup for a startup — especially one that will depend, for now, on outside entities for production. Fisker likens it to a marathon and one that starts next year.
This interview has been condensed and lightly edited for clarity.
How is Ocean production going at Magna Steyr? You have been estimating the ramp-up to 42,000 cars by the end of next year. Any updates to that? What have the biggest headaches been?
The 42,000 is still the same. That hasn’t changed. We developed the Ocean in record time. We have developed it in less than two and a half years, which is sort of unusual in the car industry, where you normally spend four to five years developing a vehicle.
One of the negatives about that is we couldn’t really convince any of the authorities to [certify the car for safety and emissions] faster. So we’re actually starting production and still waiting for some homologation, which we should be getting in February.
I think we’re not immune to supply chain issues, either. We also have to work with our suppliers to figure out how we get them to ramp up. Probably from now until the end of Q1, the whole goal here is to get all of the suppliers lined up, some a little slower than others. So that’s why we set a very low ramp of 300 vehicles by the end of Q1 next year.
“I think we’re not immune to supply chain issues, either.”
Magna could probably produce several thousand vehicles, but we just didn’t want to take that risk and have some suppliers that couldn’t follow that speed. In this environment, maybe the most difficult thing is to make sure that you get all suppliers to the same speed. Once in a while, some car makers have to stop production just because of one or two parts — and you can’t finish a car unless you’ve got all of the parts. You don’t want to be standing with thousands of cars that can’t ship because one supplier can’t deliver the parts. So that’s what we’re working on right now.
After that, it’s actually a very steep ramp-up compared to, I think, any other startup. We are planning around 8,000 vehicles in Q2 next year, which is quite a lot. But we are comfortable with that because we have taken more time to align suppliers. We didn’t want to jump out claiming to do thousands of cars in the first quarter and then end up with much less, and then it’s sort of a disappointment. We are trying to mitigate the risk here.
Let’s talk more about manufacturing. Your company has an unusual approach to it. You’ve extolled the benefits of your “asset-light” model. In 2020, you wrote that the industry has an overcapacity problem. Sitting where you are now, two years later, how do you feel about that after a year or two where that has very much not been the case?
Overcapacity, meaning there is too much manufacturing capacity versus the cars [being produced.] And that is still the case today. I saw the other day that Stellantis is closing a [Jeep] factory in Illinois.
I think we did the right thing. It’s not just about capacity, quite frankly, it’s really about the difficulty of manufacturing. I mean, you’ve heard even Elon [Musk] talk about manufacturing hell and how difficult that was.
And I think that especially if you’re not from the car industry, I don’t think people are aware of how difficult it is to manufacture a car. It’s not just putting the parts together, but it’s getting all these parts just in time, in the right quality.
One of the things we did at Magna is we spent $750,000 on a zero-tolerance model. It’s basically three solid blocks of aluminum milled out with almost zero tolerance. And what we do is we take parts from suppliers and put them on this milled-out aluminum block.
What that does is, you’re checking if suppliers delivered the part in the quality and measurement they’re supposed to. Sometimes some suppliers may have a little bending issue with something and a part is two or three millimeters off.
The problem with that is if something doesn’t fit the next panel, then that moves, and that moves, and it’s a domino effect. And that’s where you see a lot of rework happening. We want to avoid that because that’s expensive. That happens many times in the new vehicles, specifically for startups, and that’s why you see this slow production. It takes you, instead of hours, days to make a car because people have to go in and manually adjust things. That’s when you don’t get the ramp-up.
This is really where I feel we have done the right thing because we are on the right path to ramp up manufacturing. And we are the only ones who didn’t announce a delay in our manufacturing. As far as I know, we’re the only startup that has not announced a reduction in our forecast of sales.
Do you see your production model as a long-term plan for the company?
I think that when you have an agile fast-moving startup company, you should want to use the advantages of being agile and fast moving.
I’m not making any 10-year plans. I want to be able to move with whatever is happening in the world. If my 10-year plan was to source everything out of Russia, I would be in deep trouble right now.
“As far as I know, we’re the only startup that has not announced a reduction in our forecast of sales.”
The contract manufacturers are a part of our plan. And it was a part of our plan to get fast to market with high-quality cars. I think we have proved that worked.
You will see the quality of the cars that just came from Magna. I did personal quality inspections of the vehicles. It’s absolutely amazing. I’ve never seen quality vehicles like this right out of the gate. And I’m really, really impressed with Magna on this. They’ve definitely lived up to the expectations.
Now, does that mean that we will only use contract manufacturers in the future? No, because we are a growth company. If you go to somebody like a large car company that’s made their own cars for 100 years, I mean, of course, why would they go and change to contract manufacturing? They’re sitting there owning all of these plants.
But in our case, we didn’t own any plants. Now, when we mature and we start having more vehicles on the road, yeah, I think it’s very possible we will have our own manufacturing plant — when the time is right. I think it would be a good mixture of both contract manufacturing and our own manufacturing plant. But it’s not something we wanted to start with.
Are there any other partners you may look at for subsequent vehicles besides the PEAR at Foxconn?
Well, the only thing I can say is we did have several OEMs interested in sharing both our Ocean platform and our PEAR platform. And I think sharing is something that is advantageous in the next few years. It may not be advantageous in 10 years when everyone has high-volume EVs.
Look at the biggest companies in the world. You take the five or 10 biggest car companies in the world. None of them are making a quarter of a million EVs of one model, but they do it in all the gasoline cars. Now, that means they don’t have that volume advantage that they normally have with gasoline cars, which means that the pricing of their so-called volume models is a problem because they don’t have volume enough to get the pricing down. The only one that makes volume that high right now is Tesla.
I think, for us, if we share a platform with an OEM, we think this is very beneficial because we both then get high-volume components into an EV and can be competitive — as long as we are not a direct competitor. We are talking to a couple of OEMs about that opportunity. And we’re not direct competitors. I think that could benefit Fisker a lot.
Are there any potential partners you can share?
No, I can’t give you that information. But I can just give you a high-level idea of what we’re looking at.
I want to talk about PEAR. That $29,900 price point you’re claiming is very interesting. Why go after the affordable EV market, which is a pretty neglected one? And do you feel that car can be profitable at that price?
Why go after this market? Because I want to go into markets where I see opportunity. Would I love to design a $150,000 four-door sports sedan? Absolutely. Do I see an opportunity in that market? No, because there are already five or six or seven. It’s getting almost congested with luxury EVs.
I think the biggest opportunity is actually in the more affordable segment right now. One of our brand pillars is sustainability. Our mission is a cleaner world for everyone, right? So if that truly is our mission, how do we create a clean world for everyone? We need everyone to own an EV and everyone cannot afford an $80,000 electric SUV or a $120,000 electric sedan, no matter how cool they are.
“Why go after this market? Because I want to go into markets where I see opportunity.”
We need to find out how to get EVs to the broader population that cannot afford these expensive vehicles. And there have been some attempts that have been pretty boring low-cost vehicles, and they didn’t take off.
So our aim with our PEAR was two things. First, it had to be affordable. And second, it had to be exciting and innovative because you have to want this vehicle. You have to desire it. And I believe that even if you buy a $30,000 car, you still want that desire, that excitement, that innovation.
We had to completely rethink how we develop a car in terms of how to get the cost down. We had to come up with new ideas, and one of the things we are heavily looking at is reducing the number of parts in the car dramatically to lower cost.
We have also decided to do a complete steel platform and steel body, again for lower cost. Yes, aluminum was lighter, but it’s more expensive and it’s more expensive to repair. So we went for old steel. And then we went very radical with the interior design in terms of simplifying it for a low cost.
We then also looked at innovations in the vehicle itself. We have a new way of getting into the trunk we call the Houdini trunk. It doesn’t open like a normal hatch or a normal trunk, which can be very beneficial specifically in tight places when you want to get into a trunk.
We looked at how we could broaden the appeal of this car beyond private ownership. Can we make this vehicle ideal for ridehailing, car-sharing, and food delivery? So we looked at broadening the market for those vehicles so we can get super-high volume.
We’re aiming at 250,000 volume, which is very high, annually. To do that, we have to get the price right, we have to make it desirable, and we have to broaden the potential market.
Those are the three things we looked at, and right now, we’re on target. We want to make money on the base model as well. You’re never going to make as much money in the base model as in a fully optioned-out model; that’s just how the industry works. But we do expect the vehicle to still come in at $29,900, and we’re going to make money on it.
“We’re aiming at 250,000 volume, which is very high, annually.”
Can you speak to the parts you’re trying to reduce in the PEAR? Is there anything else you feel is superfluous in car design that you’ve been able to cut down on?
If you look at an interior today, it’s hundreds and hundreds of parts. If you sit in your car, you will notice all the parting lines in your dash panel. You’ll see all the layers. And if you start counting, you’d look at your door panel, and it probably consists of seven or eight parts that are broken up. And it can come with different trims. Those are the things that we try to simplify, while still making a cool, exciting design.
The other thing we did was we brought in advanced manufacturing right away. Normally, manufacturing comes in at a later stage in development. But we brought them in from the beginning. And we had discussions on certain parts, saying, “Hey, does that part really need to be in two? Can you make it into one part, and will it be easier to manufacture and assemble?” So we have these discussions very early. And I think that’s also a little unique.
We just basically looked at everything, even under the underbody. How can you simplify that, including how you put in the battery? Everything.
I want to shift gears a little bit. You had the report from the short-seller firm earlier this month. Do you have anything to add since that’s happened? Do you see your company taking any sort of action as a result of that?
Well, the guy is a simple crook, right? You can quote me on that.
You know the type of BS, quite frankly, he was coming out with — I was surprised that anybody even printed that stuff. It was just completely ridiculous. And I’ll mention again, we have no bank guarantee with Magna. Our vehicle is not based on a Chinese platform. Again, a full lie.
So the guy was obviously just lying and coming up with completely unsubstantiated [claims]. I don’t think he’s shown any evidence, and I’m sure if you’re reporting on this, you would ask him for some evidence for what he’s claiming. He doesn’t have any. So that’s also why I think Reuters or Bloomberg, at the end of the day, changed their headlines — because when they asked for that evidence, there was none.
“So the guy was obviously just lying and coming up with completely unsubstantiated [claims].”
I just want to say, we have over 250,000 private little investors. Two hundred fifty thousand private people, mostly in America, have put their savings in Fisker. And that guy is able to wipe out their investment with a blatant lie. That is sad.
Now, are we going after this? Absolutely, and I won’t comment any more on that. It’s unfortunately not easy to do. But believe me, we’re doing it.
Let’s talk about the Ronin. A lot of your background is in designing sports cars, but why did you want to do that now, early on in the company’s story? And how do you balance things like that with delivering on all of these promises?
Let me start with striking the balance. We have divided the company up in an interesting way as we develop cars, which I don’t think anybody else has. We do a lot of simultaneous development. We actually move the teams around on different programs when they’re done on a certain part.
The Ocean is pretty much done. So we are moving teams over to PEAR. For Ronin, we set up a specific Fisker company in England, and they do low-volume development of vehicles. It’s run by an ex-Aston Martin engineer that I know well, who knows how to develop low-volume vehicles at a fairly low cost. It doesn’t have a negative impact on what we do [elsewhere].
Why are we doing the Ronin? At the end of the day, I’m a car guy. I love sports cars. But also, what it really does is it gives us the opportunity to explore new ideas that initially may be too expensive for a high-volume mass-market vehicle.
We’re looking at a couple of new ideas for this vehicle. One is how to integrate the battery into the vehicle itself. That will mean we can have more energy density, targeting the 550- to 600-mile range. We don’t have a final number yet because it’s in development, but that will, at today’s standards, be probably the longest you have.
“At the end of the day, I’m a car guy.”
We want this to be a GT, where you really can jump in the car and drive from LA to Napa Valley, or something like that, or from Paris to Monaco or whatever. Doing this development allows us to look into the future, to try something out.
Secondly, we are looking at something we call a virtual B-pillar for crashes. That has been very difficult to deal with for many, many years. If you think about the old cars in the ‘60s, they have no B-pillars where the windows rolled down. It was really cool. And so we had to come up with some new technical solutions there.
We are looking at a super lightweight, foldable hardtop roof while still doing unique packaging for the interior. So even though it’s a convertible with the roof up, it would have the interior space of a luxury sedan. When you look at any convertible, even a Rolls-Royce, it’s not very comfortable in the back of these cars. But we are aiming for a full five-seater, actually, and a full grown-up to be able to sit in the rear of this vehicle
So we are trying some new ideas in this vehicle and, of course, using exotic materials as well for [lighter weight]. We are also looking at taking sustainability to the next level using materials that today may be too expensive.
Call this a “technology carrier.” We put all our technology ideas into this vehicle because we don’t have the constraints of costs that we have with a PEAR or an Ocean.
Anything else you can tell us that maybe no one’s heard yet from Fisker?
I think our conversations with OEMs are going to be really interesting.
I do believe next year is going to be a phenomenal year, not only for us because we’re in production with the Ocean but generally for EVs because we are seeing a lot more EVs coming to market. I think there’s going to be a lot more choices for people. I think that’s super exciting.
You know, we haven’t gotten our final EPA numbers [for EV range] or WLTP numbers. But if we hit those numbers, which we believe we will do, we will have the longest range in our segment. So I’m excited about that.
I still don’t want to announce anything too early. It’s hard to give a scoop here. Maybe one thing I’ll say is, I still want to show the Ronin sometime later next year. I think that could be super exciting to show that car. It’s very radical. So I hope we manage to at least show that vehicle next year.