It wasn't that long ago that electric vehicle (EV) sales were gaining momentum and on the verge of entering mainstream territory. Oh, how quickly things can change.Emerging EV manufacturers fisker (FSR -5.88%) is currently struggling to survive amid high interest rates, charging infrastructure challenges, increased competition and a dwindling mountain of cash. But is Fisker stock destined to zero, or is there still hope for long-term investors?
ugly numbers
In late February, Fisker reported a rough fourth-quarter net loss of $463 million while announcing plans to cut 15% of its workforce. The company managed to generate $200 million in revenue, but Fisker's cash and cash equivalents fell to $396 million.
These ugly numbers were brought on by a year of challenges, including delays with suppliers and trouble delivering vehicles to customers. In fact, Fisker was only able to produce 10,000 cars in 2023, less than a quarter of its original forecast, and was unable to deliver even half of that number.
In mid-February, Fisker received a warning from the New York Stock Exchange (NYSE) that it could eventually be delisted from the exchange because its stock price had fallen below an average of $1 per share for 30 consecutive business days. received a violation notice.
If you want more bad news, the National Highway Traffic Safety Administration (NHTSA) has begun a preliminary evaluation after receiving four complaints of unintended vehicle movement in the 2023 Fisker marine vehicle. It would be good to say. The complaint alleges that people were unable to shift and park, vehicles did not shift into the intended gear, or both. One of the complaints includes an allegation of injury.
In his Feb. 29 report, Fisk highlighted the challenges, saying:expects to conclude that its ability to continue as a going concern is in material doubt when its annual financial statements for the year ending December 31, 2023 are filed with the SEC. ”
All in all, things are looking pretty dire for the EV startup, but there is a glimmer of hope for investors in the form of a potential partnership.
Joined Nissan
Unexpected developments will occur in the EV industry in 2024, nissan (OTC: NSANY) The chances of helping Mr. Fisker are unexpected, to say the least. But it's a possibility, as Nissan and Fisker are negotiating a deal that would provide the Japanese automaker with an electric pickup truck platform and provide a lifeline to the struggling EV company.
This potential financial lifeline would send more than $400 million in investment to Fisker and allow Nissan to build its own electric pickup truck on Fisker's truck platform, as well as Fisker's planned Alaska pickup in 2026. The truck will be able to be produced at one of Nissan's U.S. assembly plants.
Is that enough?
While a potential lifeline for Nissan would be welcomed by investors, the truth is that Fisker will likely need even more support, as the threat of bankruptcy is real. Fisker previously said it was in talks with creditors about the possibility of making much-needed investments.
Even if Nissan and Fisker strike a deal, the latter's Alaska truck (expected to debut at around $45,000) may not come close to the savings needed. This truck will compete in the next segment. fordF-150 Lightning, general motors“Chevrolet Silverado EV, RivianR1T and its next vehicle R2 platform, and teslaCybertruck.
There are many ways to avoid Fisker stock going to zero, and without significant help, Fisker's story could realistically end in the next 12 months.
Daniel Miller has held positions at Ford Motor Company and General Motors. The Motley Fool has a position in and recommends Tesla. The Motley Fool recommends General Motors and recommends the following options: Long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.
