It wasn't long ago that electric vehicle (EV) sales were gaining traction and appeared on the cusp of breaking into mainstream territory. Oh, how quickly things can change. Start-up EV maker Fisker (FSR +0.00%) is now struggling to survive amid high interest rates, charging infrastructure challenges, intensifying competition, and a dwindling cash pile. But is Fisker stock doomed to drop to zero, or is there still hope for long-term investors?
The ugly numbers
In late February, Fisker reported a rough fourth-quarter net loss of $463 million while announcing plans to slash 15% of its workforce. While the company managed to generate $200 million in revenue, Fisker's cash and cash equivalents dwindled to $396 million.
Those ugly numbers were driven by a full year of challenges, including delays with suppliers and troubles delivering vehicles to customers. In fact, Fisker only managed to produce 10,000 vehicles in 2023, which was less than a quarter of its initial guidance, and it couldn't even deliver half of those vehicles.
In the middle of February, Fisker received a non-compliance notice from the New York Stock Exchange (NYSE) due to its stock closing below $1 per share on average for 30 consecutive trading days, which could lead to an eventual delisting from the exchange.
If you want to pile on the bad news, you can throw on the U.S. National Highway Traffic Safety Administration (NHTSA) opening a preliminary evaluation after receiving four claims of unintended vehicle movement in 2023 Fisker ocean vehicles. The complaints allege people were unable to shift into park and/or the vehicle did not shift into the intended gear. One complaint involves an alleged injury.
In its Feb. 29 report, Fisked noted challenges and said it "expects to conclude there is substantial doubt about its ability to continue as a going concern when its annual financial statements for the year ended December 31, 2023, are filed with the SEC."
Overall, things are looking pretty dire for the EV start-up company, but there is a glimmer of hope for investors in the form of a potential partnership.
Enter Nissan
2024 is sure to bring some unexpected developments in the EV industry, but Nissan (NSANY +4.05%) potentially coming to Fisker's rescue is unexpected, to put it mildly. That could be the case, however, as Nissan and Fisker are in advanced talks for a deal that would provide the Japanese automaker with a platform for an electric pickup truck and throw a lifeline to the struggling EV company.
The potential financial lifeline would send more than $400 million in investment to Fisker, enabling Nissan to build its own electric pickup on Fisker's truck platform while also producing Fisker's planned Alaska pickup in 2026 at one of Nissan's U.S. assembly plants.
OTC: FSR
Key Data Points
Is it enough?
While Nissan's potential lifeline would be welcomed by investors, the truth is that Fisker is likely to need much more help, as the threat of bankruptcy is a real one. Fisker previously mentioned that it was in talks with a debt holder about potential investment, which is desperately needed.
Even if Nissan and Fisker close the deal, the latter's Alaska truck -- anticipated to debut with a price tag around $45,000 -- might be far from the saving grace it needs. The truck would be competing in a segment with Ford's F-150 Lightning, General Motors' Chevrolet Silverado EV, Rivian's R1T and its upcoming R2 platform of vehicles, and Tesla's Cybertruck.
There are many avenues for Fisker stock to avoid hitting zero and without significant help, Fisker's story could realistically end in the next 12 months.
