DJ Luxury-Car Legend Henrik Fisker Touts His New EV Venture -- Barrons.com
By Al Root
Fisker Inc., a new electric-vehicle maker, will go public through a merger with a special purpose acquisition company, or SPAC. Fisker might be a relatively new entity, but the company's founder and namesake, Henrik Fisker, is a veteran of the automotive industry. He has high hopes for electric cars as well as his new venture.
Henrik Fisker is a legendary designer whose credits include the BMW (ticker: BMW.Germany) Z8 and the Aston Martin (AML.London) V8 Vantage as well as the electric luxury sports car, Fisker Karma.
The Karma was made by Fisker Automotive, which declared bankruptcy in 2013 after its battery supplier, A123 systems, declared bankruptcy in 2012. Henrik Fisker says he still drives his Karma.
Fisker Inc., his latest venture, is focused on producing an attractive all-electric SUV called Ocean. On Monday, the company agreed to be purchased recently by Spartan Energy Acquisition (ticker: SPAQ) at a value of almost $3 billion.
"[EV] technology has improved," Fisker tells Barron's in a phone interview when reflecting on how the industry has changed over the past decade. Suppliers are better and consumers understand the technology. "When we started no one made inverters. We had to show them how."
Inverters take direct electrical current from batteries and, essentially, turn it into alternating current for the electric motors. They are an important part of an EV drivetrain.
Costs are coming down, too, and Fisker believes his new SUV will be priced less than some comparable products. Tesla (TSLA) has shown the world it's possible to make money selling EVs, but that isn't the only way Fisker Inc. plans to make money.
"Consumers are getting used to subscriptions," says Fisker. "Young consumers want flexibility." Fisker Inc. plans to pioneer flexible leasing. by effectively owning cars with money borrowed from a bank. Then the company will lease each car to several different customers for about eight years, with the specific lease term up to the consumer.
"There will be four to five owners," adds Fisker. "We control the car, giving us control over maintenance and recurring revenue." Importantly, ownership means tax credit for vehicle ownership also accrue to Fisker Inc.
It's an interesting idea, but flexible leasing won't determine the ultimate success of the new company. That will be about things that make any auto maker successful: managing technology and vehicle manufacturing.
Fisker, interestingly, doesn't believe batteries are a major differentiating factor in determining the long term success of Fisker Inc. or other EV players. Major battery makers are all good, according to designer, referring to companies such as Tesla partner Panasonic (6752.Japan), as well as LG Chem (051910.Korea), among others.
That doesn't mean, however, that battery tech doesn't matter. "Most efficiency comes from battery-pack configuration, the cooling, and the battery-management system," explains Fisker. Battery-technology leadership, in many respects, is a software problem.
Fisker's take on automotive manufacturing is interesting as well. "It makes no sense to build a plant," says Fisker, pointing out that the industry is awash in spare manufacturing capacity. It's "[s]marter to contract, think of the Apple (AAPL)/Foxconn model."
So far investors have liked what they have heard about Fisker Inc. Spartan stock, at one point, was up more than 90% over the past week after news of the potential deal with Fisker leaked. Spartan stock saw Tuesday gains evaporate and ended with a loss of almost 10%, following the pattern of other prominent EV stocks that day, including Tesla and another EV-SPAC, Tortoise Acquisition (SHLL).
Tortoise is buying EV heavy-duty trucking firm Hyliion.
Year to date, Spartan stock is up almost 50%, better than comparable returns of the Dow Jones Industrial Average and S&P 500 over the same span.
Spartan stock was down 10% in Tuesday morning trading.
Write to Al Root at allen.root@dowjones.com
(END) Dow Jones Newswires
July 14, 2020 13:59 ET (17:59 GMT)
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