Fisker (FSR.US) plunges 37% after hours! Warning of operational difficulties and planning to cut 15% of staff.

The electric car startup company Fisker (FSR.US) warned on Thursday that due to high interest rates leading to a slowdown in demand, sales of its flagship electric car are facing difficulties, and the company may not be able to continue operating. Fisker stated that its current resources are not enough to support demand for the next 12 months. The company announced it would lay off approximately 15% of its workforce and is in negotiations with a debt holder for potential investment. Following this news, Fisker's stock on Thursday plummeted by 37% in after-hours trading. Fisker also stated that they are in negotiations with a large car manufacturer for a potential deal, which may include investing in the company, jointly developing one or more electric vehicle platforms, and production in North America. The company did not disclose the name of the large car manufacturer or the financial conditions of this deal. Fisker stated that their goal is to deliver 20,000 to 22,000 Ocean electric vehicles by 2024, and if additional financing plans cannot be realized, the company may be forced to reduce Ocean production, cut investments, streamline operations, and further lay off employees. Prior to Fisker's warning of operational difficulties, electric car manufacturers Rivian (RIVN.US) and Lucid Group (LCID.US) both reported disappointing performances and stagnant production, as high borrowing costs have affected consumer confidence and significantly slowed demand for electric vehicles. Fisker's CEO Henrik Fisker stated, "2023 is a challenging year for Fisker, with delays from suppliers and other issues preventing us from delivering Ocean electric vehicles at the expected pace." The company has been struggling to deliver cars to customers. Despite producing over 10,000 cars in 2023 - less than a quarter of their initial forecast, only around 4,700 have been delivered. Last month, Fisker announced plans to expand its sales network by adding dealerships in addition to its direct-to-consumer distribution model. So far, Fisker has signed agreements with 13 dealer partners in the US and Europe. The company stated that their business plan "heavily depends" on successfully transitioning to the new dealer partnership model this year. Meanwhile, data shows that Fisker reported preliminary revenue of $2.001 billion for the fourth quarter, falling short of analysts' average expectation of $3.108 billion; net losses widened from $170 million in the same period last year to $4.636 billion. Henrik Fisker stated, "We do not plan to initiate external spending for the next project until we have established strategic partnerships."