EV startup Fisker’s shares plummet as it raises questions about its viability

Fisker’s shares dropped 27% due to struggling sales of its electric vehicles due to high interest rates, potentially threatening the company’s survival.

Fisker’s shares fell 27% in extended trading on Thursday after the company struggled to sell its flagship electric vehicle due to a downturn in demand caused by high-interest rates. Fisker cautioned that it might not be able to continue as a going concern.

The business, whose quarterly earnings fell short of analysts’ projections, also revealed plans to cut roughly 15% of its workers.

According to LSEG statistics, the EV manufacturer recorded preliminary revenue of $200.1 million for the fourth quarter, falling short of the average analyst projection of $310.8 million.

Fisker’s remarks and the unimpressive production estimates earlier this month from electric vehicle manufacturers Lucid and Rivian Automotive indicate that the sector may have short-term difficulties that could impede the shift away from combustion engines that run on gasoline. Additionally, the business said that its net loss increased from $170 million to $463.6 million in the fourth quarter of last year.

Fisker said last month that it would be opening dealerships in addition to its direct-to-consumer business strategy to broaden its delivery network. Fisker has signed 13 dealer partners in Europe and the US thus far.

According to Fisker, the company’s business plan hinges heavily on this year’s smooth transition to its new dealer partner model.