Nissan’s investment in Fisker has been unveiled as a lifeline to revitalize the struggling automaker. Japanese automaker is in talks with Fisker to invest in the company’s plans for electric pickup trucks.
Just hours ago, we detailed Fisker’s dismal fourth-quarter performance, revealing a staggering $400 million loss in 2023 and an alarming cash reserve of less than $400 million.
The struggling automaker was forced to confront the harsh reality that it would be unable to sustain its operations for another year without a substantial financial boost.
It was revealed to be in talks with a giant automaker regarding potential funding that could rescue the company.
Nissan, the Japanese automaker, was the subject of a Reuters report.
Nissan is engaged in advanced discussions to invest in electric vehicle manufacturer Fisker Inc. (FSR.N), a deal that could grant the Japanese automaker access to Fisker’s electric pickup truck technology while providing the struggling startup with much-needed financial support, according to two individuals familiar with the negotiations who requested anonymity as the talks are still private.
Nissan allegedly plans to inject $400 million into Fisker as part of the proposed agreement. Nissan is set to manufacture the Fisker-built Alaska pickup truck, which was first showcased a year ago, at one of its US facilities.
If reports are correct, Nissan may utilize the Alaska platform to develop its own electric pickup truck.
The companies involved, Nissan and Fisker, declined to comment on the matter.
Fisker’s inventory plummeted more than 50% in an instant following the release of its earnings report; however, it partially rebounded after news broke that Nissan is considering an investment.
The company’s current inventory has an estimated value of approximately $295 million.
Electrek’s Take
What factors should I take into account when evaluating this? I’ve never been a huge proponent of Fisker, and I’ve cautioned investors against getting involved with the company previously.
If the report is accurate, it’s unclear what strategy Nissan is employing with this move. While it may seem like a tempting solution to boost their electric pickup truck development, taking over the company could be a costly and risky move, potentially diluting its value.
The company’s valuation has plummeted below $300 million, a concerning trend for an organization that generated $200 million in revenue during the last quarter of the rapidly growing electric vehicle market; yet, appearances can be deceiving.
Fisker’s early fundraising efforts were marked by determination, as it pursued convertible notes that have since ballooned to a staggering $1.2 billion, according to its most recent SEC filing.
Without a viable means to settle the debt, Fisker is poised to transform its shares into inventory, effectively diluting existing stakes for current shareholders.
The acquisition of all shares by Nissan, combined with a focus on rapidly advancing its electric vehicle initiatives, is likely to yield exceptional outcomes.
What do you suppose? SKIP
