Fisker Inc. (NYSE: FSR) shares plummeted in pre-market trading after the EV startup cut its 2023 production forecast. The company cited challenges in ramping up deliveries and flagged concerns over internal controls for financial reporting.
The new projection indicates a scaled-down production range of 13,000 to 17,000 electric vehicles for 2023, a sharp decline from the initial estimate of 20,000 to 23,000 vehicles. This move is aimed at preventing inventory buildup and enhancing working capital management.
During a post-earnings conference call, Chief Financial Officer Geeta Fisker acknowledged the potential short-term pain for investors but underscored the responsible and essential nature of the decision for the company’s long-term stability.
“This may be short-term pain and it may not be something that Wall Street wants to hear but it is extremely responsible for us, and it is essential for us that we do this for the long term.”
Fisker stock plummeted over 13% in pre-market trading on Tuesday.
Fisker Inc. (NYSE: FSR) had already revised its production forecast in August due to issues with a primary supplier, which required additional time to lift capacity. Although the supply chain has stabilized, the company acknowledged on Monday that it anticipates occasional bottlenecks from specific suppliers in the future.
This latest reduction in production forecasts aligns with concerns of an electric vehicle demand slowdown. Tesla CEO Elon Musk recently warned about the impact of high interest rates on consumer sentiment, echoing cautious statements from leading automakers such as Ford Motor Company (NYSE: F) and General Motors Company (NYSE: GM).
Luxury EV maker Lucid Group, Inc. (NASDAQ: LCID) also recently adjusted its production forecast downward.
Last month, Fisker Inc. (NYSE: FSR) lowered prices for its high-end Ocean Extreme SUV, joining a price war initiated by Tesla to boost demand. However, the company clarified its limitations lie in delivery and service infrastructure rather than production capacity and demand.
CEO Henrik Fisker acknowledged customer frustration due to delayed deliveries and outlined ongoing efforts to address the issue. Fisker is actively expanding its workforce and hiring 20-30 people every week. The company is also working with more logistics partners and establishing new facilities to speed up the deliveries.
Fisker reported delivering 1,200 vehicles in October, well above the third-quarter figure of 1,097. The company is on schedule to achieve an even higher number of car deliveries this month.
Fisker reported a Q3 revenue of $71.8 million, with a loss of $91 million, both of which fell short of expectations.
Fisker postponed the release of its financial results on November 8 due to the departure of its former chief accounting officer. On Monday, the company disclosed “material weaknesses” in its internal control over financial reporting. These issues involve complex accounting across multiple countries, including convertible notes, derivatives, and inventory in the contract manufacturing of its vehicles.
Fisker assured stakeholders it is actively addressing these internal control concerns by hiring experts.