Text size
Fisker Inc., a new maker of electric vehicles, will announce a merger with a SPAC. The company may be new, but its founder and namesake Henrik Fisker designed the BMW Z8 and Aston Martin V8 Vantage. He has high hopes for electric vehicles and some innovative ideas.
Simon Dawson / Bloomberg
Fisker Inc., a new maker of electric vehicles, will announce a merger with a special-purpose acquisition company, or SPAC. Fisker may be a relatively new entity, but the company’s founder and namesake Henrik Fisker is a veteran of the auto industry. He has high hopes for electric cars, as well as his new company.
Henrik Fisker is a legendary designer whose credits include the BMW (ticker: BMW.Germany) Z8 and Aston Martin (AML.London) V8 Vantage, as well as luxury sports car Fisker Karma.
Karma was done by Fisker Automotive, which filed for bankruptcy in 2013 after its battery supplier, A123 systems, filed for bankruptcy in 2012. Henrik Fisker says he still handles his Karma.
Fisker Inc., its latest company, is focused on producing an attractive all-electric SUV called Ocean. On Monday, the company agreed to be recently purchased by Spartan Energy Acquisition (ticker: SPAQ) for nearly $ 3 billion.
“[EV] technology has improved, “says Fisker. Barron’s in a phone interview reflecting on how the industry has changed in the past decade. Providers are better and consumers understand technology. “When we started, nobody made investors. We had to show them how.
Inverters take direct electrical current from batteries and essentially convert it to alternating current for electric motors. They are an important part of an EV transmission.
Costs are also falling, and Fisker believes his new SUV will be priced lower than some comparable products. Tesla (TSLA) has shown the world that it is possible to make money selling electric vehicles, but that is not 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. The company will then lease each car to several different customers for approximately 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 the vehicle ownership tax credit also accrues to Fisker Inc.
It is an interesting idea, but flexible leasing will not determine the ultimate success of the new company. It will be about things that make any automaker successful: managing technology and vehicle manufacturing.
Interestingly, Fisker does not believe that batteries are an important differentiating factor in determining the long-term success of Fisker Inc. or other EV players. The main battery manufacturers are good, according to the designer, referring to companies like Panasonic, a partner of Tesla (6752.Japan), as well as LG Chem (051910. Korea), among others.
However, that doesn’t mean that battery technology doesn’t matter. “The greatest efficiency comes from battery configuration, cooling, and the battery management system,” explains Fisker. Leadership in battery technology, in many ways, is a software problem.
Fisker’s opinion on car manufacturing is also interesting. “There is no point in building a plant,” says Fisker, noting that the industry is awash with additional manufacturing capacity. It is “[s]marter to hire, think of the Apple (AAPL) / Foxconn model. ”
So far, investors have liked what they’ve heard about Fisker Inc. Spartan shares, at one point, rose more than 90% in the past week after news of the possible Fisker deal leaked. Spartan shares saw Tuesday’s earnings evaporate and end with a loss of nearly 10%, following the pattern of other prominent EV stocks that day, including Tesla and another EV-SPAC, Tortoise Acquisition (SHLL).
Tortoise is buying the heavy duty trucking company EV Hyliion.
To date, Spartan shares are up nearly 50%, better than the comparable returns of the Dow Jones Industrial Average and S&P 500 over the same span.
Spartan shares fell 10% in trading on Tuesday morning.
Write to Al Root at [email protected]
.
