A crowded market

Fisker, 60, drew attention designing cars such as BMW's Z8 and Aston Martin's DB9 before launching his first company, Fisker Automotive, in 2007. The Anaheim startup produced the Fisker Karma, an undulating $100,000-plus plug-in hybrid coveted by Leonardo DiCaprio and other Hollywood celebrities. Fewer than 3,000 were made before the company went under when its battery supplier went bankrupt, among other setbacks.

He had bigger dreams for a new company that would sell electric vehicles to car buyers across the globe. It went public in 2020 via a SPAC, or special purpose acquisition company, backed by big Wall Street private equity firm Apollo Global Management. The company raised $1 billion in capital and was valued at $2.9 billion, a figure that soared as investors poured in, capitalizing on the sky-high expectations for EV sales.

This time around, Fisker suffered some self-inflicted wounds, analysts said. That included releasing a vehicle — the Ocean — that was not quite ready for market, while trying to reduce its capital costs and raise profit margins by outsourcing all manufacturing. That was unlike Tesla or other California startups such as Lucid and Rivian in Irvine, maker of the popular R1T pickup truck, which operate their own domestic plants.

"We're like Apple-Foxconn," Fisker said days prior to the company's October 2020 debut on the New York Stock Exchange, referring to the Chinese maker of Apple's iPhone. "This is the target we're setting for ourselves, to be the most profitable car company in the world."

Fisker had contract manufacturing experience with the Karma, which was made by a Finnish company. This time, he reached an agreement to have the Ocean produced at a plant in Graz, Austria, operated by Magna Steyr, a subsidiary of Magna International, a large Canadian manufacturer of automobile components.

Magna is highly respected in the automotive world and the plant has produced vehicles for U.S. and foreign automakers. Magna co-developed the Ocean's platform, including the chassis and underlying technologies, but ran into manufacturing challenges last year. Fisker had to cut its production estimates several times, and when the cars were released last year they had software bugs.

In one YouTube video released last month, popular reviewer Marques Brownlee praised an early version of the car for its styling, ride and innovative features, but then slammed it for problems with its drive modes, Bluetooth connectivity and other issues. The review — titled "This is the Worst Car I've Ever Reviewed" — got 4.8 million views.

Software bugs

Fisker has said integrating the software for each component manufactured by the company's subcontractors has been one of the Ocean's biggest challenges. Last month, Fisker said the company would send its first over-the-air software update for the Ocean — a technology Tesla pioneered — and continue updates throughout the year and lifetime of the vehicles, using "driver feedback to fix software bugs and improve features."

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