People need to stop comparing Fisker to Tesla
Long time readers of mine know that I am a fan of companies who are largely invested in sustainable mobility. Fisker is not one of those companies.
I'm going to forewarn, this article is going to be brutal. There's a reason why though, it's because I have zero tolerance in business, trading and generally in life for posers. I cannot stand someone who stands in front of a podium and talks with zero substance. It's normally why I seldom have time for politics. Automakers are not exceptions to that rule. Anyone who does a lot of talking and not much doing tends to draw my ire.
Fisker, of late, and their CEO Henrik have been one of those automakers who are drawing my ire. And to be frank the company is starting to look more and more like a pyramid scheme. I feel like I need to preface this with the fact that I was originally a massive Fisker supporter and fan. I thought the concept was different and they were tapping into a niche which would potentially evolve into a huge part of the automotive market. The affordable end of electronic vehicle manufacturing was yet to be truly harnaced.
But then Tesla came to market with the Model 3. Rivian released a range of protoype products which were backed by Ford (proving that their products both existed and were full functioning at claimed capacity) and the big manufacturers one by one started releasing their own cheaper EV alternatives such as the Nissan Leaf. And one by one, they all left Fisker behind.
Then Fisker's business model started changing with cars like the Ocean. Suddenly Fisker were self proclaiming to target the luxury end of the market but providing a payment method that made that luxury affordable to the mid-end, finance. And that got me concerned. Finance is one of those things in automotive which needs to be proven and highly regulated. I'm so scared of finance that I tend to avoid talking about it because I myself am not qualified enough to sell any sort of finance. I can comment on it but when we start going down the path of giving financial advice I get nervous.
What I do know is that offering finance on a product that is unreleased with zero consequences is both bad for the company and can potentially be bad for the consumer (depending on what the legal implications of a lease may be). I'm not saying Fisker have got that part wrong, I want to make that totally clear. What I can tell you is that no cars have been released and no contracts have started and that makes it hard to tell what the future holds for that version of Fisker's company structure.
There are some things that I can tell you and the first is that Fisker is absolutely nothing like Tesla. And I'm not just talking about the products, of which Fisker only has one and when compared to its competitor from Tesla, the Model Y, is different in price and offering. It's more than that. Tesla grew and sold at a similar rate. They didn't oversell themselves originally and the company went through a period of what I would call natural growth. Basically customer demand became as such that the product was sought after.
Fisker on the other hand want to come to market with one big bang. And in between manufacturing partnerships and mergers you end up discovering that very little of a Fisker Ocean is actually made by Fisker if anything at all. Fisker want to be ready to serve up all the stock the market demands on day 1. And that's fine, except they're treating their pre-order process alike to Tesla's. They're allowing customers to reserve the Fisker Ocean through deposit in the leadup.
Worryingly still for customers this is a purely online process and unalike most online purchases there is absolutely no tangible reassurance that an order is going to be fulfilled. There isn't a dealership you can query your order with and no one person to reassure you that you'll get what you paid for.
That leads me to an important conclusion and a massive difference between Tesla and Fisker. Fisker is not a customer-centric company. That point is further enforced by Fisker's lack of a marketing strategy. Henrik tries to take a page out of Elon Musk's book and rely on public relations to sell his product. Unalike Tesla though, Fisker have not at all developed the customer relationship infrastructure around that strategy. Their website is difficult to navigate and includes little product information if any at all. In fact prior to a pre-order page for the Fisker Ocean I couldn't actually find any tangible information about the car at all.
What the Fisker website does reveal is a scarier concept to me. It's a website that is slanted to selling the company to investors. Fisker Inc. went public at the height of the COVID19 pandemic, in July of this year and already the company is trading at stupid levels for a maker that is yet to make a car. Fisker Inc. is trading at a price which is 3 times Ford's current price.
But I want to briefly take a step back there and ask a question. Why is Fisker trading publically at all? Tesla didn't trade publically prior to having a tangible product on the market. And Rivian, who are in a far advance stage of selling cars both in delivery date and development, don't trade publically at all. So why is Fisker going down that route?
Henrik Fisker claimed during a CNBC interview with Jim Cramer on October 30th that the SPAC offering (a circumvention of an initial public offering and a way to go public without having the backing of bigger funds) was a way for Fisker Inc. to effectively raise mass funds with a streamlined regulatory process. I think it's because Fisker Inc. are trying to rely on the hype Tesla created on the stock market over the previous 7 years to fund their EV projects for the next 7.
Is that fair? Not really, no. I think Fisker are relying on the goodwill of investors that's been created by EV startups who have worked far harder and who are much more trustworthy. And that leased goodwill only gets you so far. I don't completely know that the goodwill will get you all the way up to Q4 in 2022 when Fisker are claiming that the Ocean will finally go into production (seriously guys, this car was announced the same time as the Rivians and even those cars are slated for production next year).
So where does that leave Fisker? Well for me anyway, until they have a strong plan moving forward and tangible results which aren't based on goodwill, it leaves them nowhere. And much worse it leaves them uninvestable for me.
The fact that Fisker didn't go down the path that Rivian did and find a strong automotive partner to help them with manufacturing and development is also beyond me. In my mind anyway it raises questions about whether the company tried to find those partners but not enough of them had faith in the vision.
Long manufacturing delays, reliance on public investors, pre-launch finance products and investor centric marketing strategies are just too many strikes for me. It feels like the company is launching for all the wrong reasons. And while I remain excited to see the example of the Fisker Ocean in person, I'm also deeply skeptical as towards whether we'll ever actually see that car. Nice try Fisker, give me more meat because I can't live on just bone.