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U.S. electric automaker Fisker expects operating expenses to reach between $ 490 million and $ 530 million this year, a slight increase in its business outlook for the year which is driven by R&D spending on prototypes of its Ocean SUV, the testing and validation of advanced technologies, the hiring and its “accelerator” partnership with Foxconn.
The company, which released its second quarter results on Thursday after the market closed, raised its business outlook for non-GAAP operating and capital expenditures for the full year, compared to its previous forecast of $ 450 million to $ 510 million. The results report indicated R&D spending on prototype activities in 2021, driven by testing and validation on advanced driver assistance systems, powertrain and user interface. The company also noted increased spending on internal costs, such as virtual validation software tools, virtual and physical hiring and testing to accommodate recently tightened Euro NCAP and IIHS security regulations.
Co-founder, CFO and COO Geeta Gupta Fisker added during a call to investors that the company do a strategic decision To develop internal abilities To test and to validate, in place of to count uniquely on the third evenings.
Co-founder and CEO Henrik Fisker said in an interview Thursday that his partnership with Foxconn, which “is moving faster than expected”, is also contributing to increased spending.
“We were really aligned,” Fisker said in an interview Thursday. “I mean it’s a very unique trade deal because we’re both investing in this program; it’s not like we just hired Foxconn to build a car.
Fisker has two ongoing vehicle programs. Its first electric vehicle, the Fisker Ocean SUV, will be assembled by car manufacturer Magna Steyr in Europe. Production start-up is still on track to begin in November 2022, the company reiterated on Thursday. Deliveries will begin in Europe and the United States at the end of 2022, with a plan to reach a production capacity of more than 5,000 vehicles per month by 2023. Deliveries to customers in China are also expected to begin in 2023.
In May, Fisker signed an agreement with Foxconn, the Taiwanese company that assembles iPhones, to co-develop and manufacture a new electric vehicle. Henrik Fisker said the two companies had moved forward on the design “fairly quickly” and were now delving into engineering and technical details which include work on a patent for a new way to open a safe and other technological innovations. .
“We have accelerated very quickly and we will probably already have a few first prototypes by the end of this year,” he said.
The companies have also decided that this EV will be designed for the urban lifestyle.
“You can’t make a car for everyone,” he said. “You can’t make a car for a farmer and for someone who lives in an apartment; they are two different vehicles, so we chose the urban lifestyle for this vehicle.
Production of the Project PEAR car, which stands for Personal Electric Automotive Revolution, will be sold under the Fisker brand in North America, Europe, China and India. Pre-production is expected to begin in the United States by the end of 2023 and then ramp up the following year, Fisker said Thursday.
Henrik Fisker did not disclose the manufacturing site in the United States. He made a recent visit to the Foxconn Wisconsin manufacturing facility, noting that it was an “impressive” plant, as was the region’s supply chain. The final decision rests with Foxconn, Fisker noted. However, Fisker wants to produce the electric vehicle in a condition that allows automakers to sell directly to customers. Wisconsin currently prohibits this practice.
“This will be one of the main things that needs to change so that we can go to the store and sell our electric vehicle,” he noted.
Earnings Results
Here are the basics of the company’s second quarter results. Keep in mind two important factors: Fisker was not listed on the stock exchange at the same time last year, there are no year-to-year comparisons yet; and this company is essentially pre-income, although it made $ 27,000 from the sale of merchandise.
Fisker said it generated $ 27,000 in revenue, a 22% increase from the previous quarter. The automaker reported a net loss of $ 46.2 million, or $ 0.16 per share, compared to a net loss of $ 176.8 million in the prior quarter. This large net loss in the first quarter stems from changes in the way the SEC handled non-cash items and resulted in a warrant liability of $ 138 million in the first quarter. The public mandates are now withdrawn and the company says it will no longer have these impacts on future profits.
The operating loss was $ 53.1 million in the second quarter compared to a loss of $ 33 million in the first quarter. It is important to note that the company has conserved its cash flow by using what it describes as a ‘lightness of assets’ approach, which means it does not build a factory, but rather relies on partners. . Cash and cash equivalents were $ 962 million in the quarter ended June 30, slightly lower than $ 985.1 million in the first quarter.
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