On Monday, Fisker, which is a popular electric vehicle startup, cut down its production guidance in 2023. This is due to the fact that the company is struggling to increase its deliveries. Apart from that, it also flagged weaknesses in internal controls related to financial reporting. This factor sent the company’s shares down by 14%.
Geeta Fisker, the CFO of Fisker, informed through a conference call –
“This may be short-term pain and it may not be something that Wall Street wants to hear but it is extremely responsible for us, and it is essential for us that we do this for the long term.” (source)
Currently, the company expects a production of 13K to 17K electric vehicles in 2023. This data is quite far from its prior projection of 20,000 to 23,000 vehicles. The company slashed its production targets to make sure that too much inventory is not left out, which can thus help the company manage its capital better.
Fisker had already slashed its production forecast in August 2023. In that case, they blamed a major supplier who needed more time to lift capacity. However, on Monday, Fisker stated that although the supply chain is stabilized, the company still expects a few suppliers to go into occasional bottlenecks.
The latest cut in production forecast is due to Fisker’s fears of a slowdown in demand for electric vehicles. A few days ago, Elon Musk, the CEO of market leader Tesla, warned that there could be a slowdown in demand. This is due to high rates of interest meant for fighting high inflation. Hence, there is a souring of consumer sentiment.
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