Benzinga - by Anan Ashraf, Benzinga Editor.
Beleaguered EV maker Fisker is facing a significant setback as more than 40,000 customers have reportedly canceled their vehicle reservations. This development comes at a time when the company is grappling with financial challenges and a potential bankruptcy filing.
What Happened: The cancellation of reservations for the Fisker Ocean, the company’s flagship electric vehicle, has surpassed 40,000, as per internal company metrics obtained by Business Insider. This figure represents a significant portion of the over 70,000 reservations made since the company began accepting pre-orders in November 2019.
The cancellation rate has been averaging around 70 to 80 per day, the report said. The cancellations also add to the company’s costs, with each reservation costing $250, refundable except for a $25 processing fee. This would take the amount to be refunded for the 40,000 cancellations at about $9 million.
As per the report, other order cancellations are running up to a few thousand which are not fully refundable.
Why It Matters: Earlier this week, Fisker announced significant price cuts for various trims of its 2023 model year Ocean SUV. While the Extreme trim of Fisker's Ocean SUV is now priced $24,000 lower at $37,499, the Ultra trim will be priced $18,000 lower at $34,999 and the Sport trim $14,000 lower at $24,999.
The price cuts followed Fisker's recent delisting from the New York Stock Exchange due to low share prices. Additionally, potential investment talks with a major automaker recently collapsed, leaving Fisker's financial future uncertain. The company had previously expressed concerns about its ability to generate enough revenue to stay afloat.
Fisker's cash balance has dwindled from $736.5 million at the end of 2022 to $325.5 million by December 2023. The company reported a net loss of $463.6 million and revenue of $200.1 million for the fourth quarter.
Despite producing around 10,200 Ocean SUVs in 2023, Fisker only managed to deliver 4,929 vehicles. The company currently holds an inventory of approximately 4,700 vehicles, including both leftover 2023 models and newly produced 2024 units. To address inventory and financing issues, Fisker initiated a six-week production pause earlier this month.
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