What's up guys and welcome back to wall street millennial on this channel, we cover everything related to stocks and investing the spac boom of 2020 and early 2021 have seen the market inundated with electric vehicle companies trying to recreate tesla success. Many of these companies have questionable track records and probably would not have even been able to survive if it had not been for receiving spec financing, for example, after failing to deliver a single vehicle since 2017, faraday future was on the brink of bankruptcy. They had burned through billions of dollars of cash and had to abandon their 1 billion factory development in nevada, but in january of 2021 they were given a lifeline when they merged with a spec to raise 1 billion of cash, while they still have yet to deliver A single car, at least they have a fighting chance of survival. Another similar company is fisker.

Fisker is an electric vehicle company that can trace its routes back to 2005, when henrik fisker co-founded fisker coach build, which later turned into fisker automotive, but after producing less than 25 000 of their karma sports car, the company failed and declared bankruptcy in 2012. in 2016. Henrik revived the brand and founded a new company fisker inc, which hopes to eventually deliver fully electric vehicles similar to faraday future. They have yet to deliver a single car to an end customer but were nonetheless able to raise 500 million dollars and go public via us.

Back in this video, we'll look at the history of fisker why they went bankrupt in 2012 and whether or not they have a chance of succeeding this time around born in denmark, henrik fisker started working in the automobile industry right after graduating from college in 1989. After working at bmw for a few years, he eventually became a senior product designer at aston martin, where he was in charge of production design for the aston martin db9 in 2005. He left aston martin to start his own automobile company. Fisker coach build this company would produce limited edition and highly customized hand-built luxury cars.

Their first vehicle was the fisker tremonto, which used the base architecture of a mercedes-benz sl and was modified to have a more luxurious look. They announced that they produced 150 tremontos, but they discontinued it after making just 15 deliveries. Their next car was the fisker latigo, which was built off the base of a bmw m6. The latigo was a commercial disaster.

They also planned to produce 150 of them, but only ever delivered one single vehicle. By this point, it became clear that there was no market for luxury coach built cars. These fiskar vehicles were just mercedes and bmws that were modified and had a fisker logo put on them. There is nothing special enough about them to justify the large markup that they charge over the price of the base model.

While fisker coach builds cars were commercial failures, they did have one major accomplishment in 2007: tesla hired them to help design the prototype. That would eventually become the model s by 2007. Henrik realized that fisker coachbuild was a complete flop, but he wasn't about to give up. He merged the company with electric vehicle company quantum technologies to form fisker automotive.

In 2008 they unveiled their first production vehicle, a luxury plug-in hybrid, called the fisker karma. It had a high starting price of 102 000, but it had the specs to back it up. It had 400 horsepower 80 kilometers of battery range and a further 400 kilometers of gas-powered range. Once the battery ran out, it was supposed to start deliveries in 2009, but was delayed multiple times.

The first deliveries weren't made until the summer of 2011. viscera outsourced. Almost all the production of the karma to third-party manufacturers, they also relied heavily on pre-engineered components developed by other car manufacturers, for example. The door handle of the karma was developed by general motors in exchange for using this fisker would pay a royalty to gm for every car that they sell.

This approach is the exact opposite of what tesla does tesla spends billions of dollars vertically, integrating their supply chain as much as possible, while this can lead to short-term complications and delays. The end result is that they have complete control over their supply chain and create almost 100 of the value of the car. In the case of fisker, they will never make that much money per vehicle sold, because so much of the purchase price goes to paying manufacturing contractors and royalties. The benefit of outsourcing is that fisker doesn't have to do nearly as much work in-house.

They credited this for their ability to develop the karma in three years, while it would otherwise have taken five years, but by 2008 fisker was already off to a rocky start. Remember that in 2007, tesla hired henrik fisker to help design the model s and paid him about 875 thousand dollars. For this service, tesla claimed that fisker only engaged in the contract to steal intellectual property, which he used in the fisker karma tesla, also claimed that fisker intentionally did substandard work. To sabotage the model s, they had to scrap the entire model, s design and restart from scratch, costing them a three to six month.

Delay henrik fisker denied the allegations. In 2008, a court ruled in fisker's favor saying that they did not find evidence that fisker did anything wrong. Tesla was forced to pay 1.14 million dollars to fisker to cover legal fees and other costs associated with the lawsuit the lawsuit with tesla was resolved, but their real troubles were just getting started. Their strategy of outsourcing, almost all components of vehicle manufacturing, was finally coming back to bite them.

Fiskers sourced their batteries from a company called a123 systems. In early 2012, they announced a massive recall of their batteries. After identifying a defect that reduced their performance, the recall would cost a123 55 million dollars and they're already losing money before this. In october of that same year, a123 ran out of cash and filed for bankruptcy with a123 no longer able to supply batteries.

Fisker suspended production of the karma for five months and postponed the launch of its new model, the fiscal atlantic. With these production issues halting their sales, fisker was running out of money fast, and things were about to get even worse. Hurricane sandy ravaged the atlantic ocean. In the fall of 2012., the storm hit a shipment of 338 karmas coming from europe after they docked at a new jersey port.

The entire shipment of cars was rendered worthless and 16 of them even caught fire as the seawater caused a short circuit in one of their control units. This caused reputational damage to the brand as it raised questions about their vehicle safety, fisker funded much of its vehicle development, with a 529 million dollar loan agreement from the us department of energy's advanced technology vehicles manufacturing loan program. The program was meant to support the auto industry during the financial crisis and help accelerate the switch to hybrid and other fuel-efficient vehicles. Fisker was a perfect candidate for this program, as their hybrid electric karma was far in excess of the government's fuel economy standards as a condition for the loan, the department of energy or doe stipulated operational milestones around vehicle production and deliveries that fisker would have to meet.

In light of the setbacks they were having with their battery supplier, they were not able to meet these milestones. At this point, the doe decided fisker was too risky and blocked further distributions of the 529 million conditional loan by early 2013, it became increasingly clear that fisker was heading towards bankruptcy without further government loans. They had no way to finish development of the planned fisker atlantic or even support the operations for continued production of the karma founder and executive chairman, henrik fisker stepped down from the company in march of 2013, citing disagreements with other members of senior executives around the business Strategy, but it was a mute point anyway, because the company was about to go bankrupt in november of 2013 fisker officially filed for bankruptcy. By this time they had only delivered a grand total of less than 2 500 karmas.

The department of energy ended up losing 139 million dollars of the money they loaned to the company, but fisker's operations continued to survive. In 2014, a chinese company called huan xiang group purchased their assets from the bankruptcy court. They renamed the company, karma automotive and rebranded. The fisker karma as the karma rivero karma automotive still operates today and has released new models, including the karma gs6 importantly won.

Xiang only bought fisker automotive's assets such as their real estate and automotive designs. Henrik fisker retained the fisker brand name in 2016. He used his rights to the brand name to start a new company fisker inc. The goal of the company was to develop an all-electric vehicle with autonomous driving capabilities and advanced battery technology.

Shortly after forming the company, they unveiled the fisker orbit concept car. It would be a fully autonomous electric shuttle made to transport people in cities, airports, college campuses and other similar places. However, the company has not made any meaningful announcements about the orbit in recent years and is unclear whether or not they are still working on it. In 2017, they started working on their own proprietary, solid state batteries.

State batteries have long been the holy grail of the ev industry, as they have the potential to be far more efficient than traditional lithium ion batteries. But the development was a lot more difficult than originally anticipated and in february of 2021 they completely dropped the project. In march of 2019, they announced their all-electric suv called the fisker ocean, which was originally scheduled to launch in 2021. It has a range of close to 300 miles and accelerates from zero to 60 miles per hour in just three seconds.

It also has solar panels built into its roof to add 1000 miles of free range per year. If you park outside and its starting price point of 37 500 puts it on the cheaper end of fully electric suvs. Importantly, the ocean will be produced by an independent manufacturing contractor in austria called magna. Magna has been manufacturing vehicles for more than a decade and outsourcing the assembly to them significantly.

De-Risk production of the fiscal ocean in the summer of 2020 fisker went public by merging with a spa. Their stock price has been extremely volatile since then, but now sits at more than forty percent. Above the initial stack price of ten dollars. They now have a valuation of four point: three nine billion dollars, despite the fact that they have yet to deliver a single car.

The launch of the ocean has been delayed from 2021 to the fourth quarter of 2022. As of june 29th 2021. They have received 17 000 pre-orders for the fiscal ocean, while 17 000 isn't bad for a new startup company. It is dwarfed by the tesla cyber truck, which has over 1.25 million pre-orders fisker plans to launch three new models by 2025..

Whether or not they can't achieve this timeline remains to be seen. At least one of these new vehicles will be produced under a joint venture with electronics contract manufacturer foxconn. Foxconn is best known for assembling the iphone on behalf of apple and has no significant experience in automobile manufacturing. They plan to build a new factory in the u.s and start producing fisker cars by 2023.

Whether or not this will be successful remains highly uncertain, while fisker's cars look to be high quality and have garnered critical acclaim, they have yet to deliver a single vehicle. Also, their heavy reliance on third-party contract manufacturers leaves them vulnerable. If any of these contractors face production setbacks, but whether fiskerink succeeds or fails, you have to give henrik fisker credit for never giving up. The current fisker inc is his third iteration of the company, and even if this one fails, there's nobody stopping him from trying again.

Alright guys that wraps it up for this video, what do you think about fisker? Do you think there is serious competitive threat to tesla? Let us know in the comments section below, if you enjoyed this content, make sure to hit the like button and subscribe. So you don't miss future uploads as always. Thank you so much for watching and we'll see in the next one wall, street millennial signing out.