It seems among the investor community, all everyone talks about are the EV (electric vehicle) stocks – and only the big ones at that – Tesla (TSLA), Rivian (RIVN), and Lucid (LCID).
One EV company that’s been flying under the radar, that is until it had big news at this year’s Los Angeles Auto show is Fisker Inc (FSR).
Fisker, founded and run by legendary automotive designer Henrik Fisker, unveiled the production version of its Ocean EV SUV.
Overall it’s a competitive package, penned by Henrik himself, and in top trim form the Ocean is targeting over 350 miles of range from an all-wheel drive, dual motor setup pumping out 540 horsepower.
While those are noteworthy figures, there are other EVs that can match these figures in that price range (around $65,000 for the higher end Ocean). The real twist here is the base Ocean, called the Ocean Sport, that will use a smaller range battery (targeting around 250 miles of range), and a single-motor front wheel drive, that will start — before any state and local incentives — at $37,499.
At that price level, no one so far, even Tesla, can match that price in the premium EV landscape. Yahoo Finance spoke to Henrik Fisker at the LA auto show about how the company plans to make this pricing work.
“We have a whole asset-light business model — it’s a little bit like Apple (AAPL), Foxconn, if you want — in terms of we concentrate on the product, the marketing, the design, the development, and then we outsource manufacturing,” Fisker said from the company’s imposing stand on the convention floor. “We don’t have to put thousands of dollars [in] each car because we have to keep the lights on in the factory, and pay real estate taxes and whatever it all is.”
Fisker is using large contract manufacturer Magna (MGA) to build its Ocean SUV. Magna makes cars and large components for clients like BMW (BMWYY), GM (GM), and even Ferrari (RACE).
In addition, one area that puts upward pressure on the price tags of EVs are batteries. Fisker is using CATL, the world’s largest battery manufacturer, to make a custom package for the Ocean, using cheaper LFP (lithium iron phosphate) battery cells for the Ocean Sport model, and more energy dense nickel manganese cobalt cells for the extended range Ocean trim levels.
On top of all that, Fisker wants this car to be the most sustainable car on the planet — hence the name “Ocean.”
“So the idea with this vehicle is to make it the world’s most sustainable vehicle, so we’ve got a solar roof that can give you up to 1,500 miles for a year, we’ve got a fully vegan interior with recycled materials,” he says. Even all the carpets are made from recycled plastic bottles and fishing nets from the ocean, and the carbon fiber elements on the car and the wheels are, you guessed it, recycled.
With 20,000 reservations in the order book right now, the company is seeing good interest in a car that won’t see the streets until the third quarter of 2022. But this is according to plan.
Fisker understands that production, versus prototyping, is hard. Tesla’s Elon Musk says this almost on a weekly basis. It’s in an extremely complicated process that requires proper systems, technical partners, and of course, capital, to get right.
The challenge for EV startups, Fisker says, is how to ramp up and produce several hundred thousand vehicles a year — and not take 10 years to do it. This is where Fisker’s partner Magna comes into a play, with its capability to produce thousands of cars of year, coupled with new capital raises the Fisker has made this year ($1 billion through its SPAC IPO and $600 million in a debt offering), to invest in R&D and acquire know-how and parts from technical partners. It’s the only way startups can compete with the GMs and Fords (F) of the world.
“A car is made of about 1,500 parts or even more, depending on how many screws you count, and all these parts have to come in just in time. They have to be put together exactly at the right time in the right sequence,” Fisker says. “I think most EV startups underestimate that. it has taken the traditional car industry many, many decades to perfect this, and that’s what they’re really good at.”
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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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