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July 18, 2020, 11:58 a.m. EDT

Fisker is going public: Five things to know about the electric-car maker ahead of its IPO

Fisker is going public at a strong time for the IPO market, with the Renaissance IPO ETF up 36% year-to-date

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By Claudia Assis, MarketWatch

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‘Legendary’ automobile designer

Fisker, the man, is best known for designing luxury vehicles for companies such as Ford Motor Co. /zigman2/quotes/208911460/composite F -0.75% , BMW AG /zigman2/quotes/202432319/delayed XE:BMW -0.23% , and Aston Martin Lagonda Global Holdings PLC /zigman2/quotes/201807162/delayed ARGGY +0.40%

Fisker is “a proven designer with a history of developing legendary vehicles,” the company said in its prospectus.

He also brings an “expert management team” to Fisker Inc., the company said. “The right team, combined with deep financial resources provided by this transaction, further position the company to succeed in a rapidly growing industry.”

Fisker has said its “‘emotional design’ will be the way his vehicles stand out in a crowded EV market,” Mainstay’s Kudla said.

IPO proceeds will be used to get the Fisker Ocean on the road

Fisker will use the proceeds of the IPO to develop the Fisker Ocean, which is expected to be available in late 2022.

The company is promising a “premium yet affordable” SUV with a starting price of $37,500, and as much as $69,000 for a higher-end model; by comparison, the Model Y, Tesla’s compact SUV, starts at $49,990.

The company says the Ocean is “a fully electric SUV with premium styling and features and has been designed to be the world’s most sustainable vehicle.” The five-seat vehicle was first showcased at CES in January.

Fisker will sell the Ocean outright and also offer it through what it calls a “flexible lease.” Unlike regular, fixed-term leases, drivers can return the car after one month, several months, or several years, with no long-term contracts, and 30,000 miles per year included in the lease, rather than the more usual 15,000 miles or so.

The Ocean has a range of up to 300 miles between charges. The car’s interior is also billed as “vegan,” using plastic, with not a piece of leather in sight. Over the years, some Tesla shareholders advocated for leather-free, “vegan” Teslas, and the company has started offering those “vegan” Teslas.

Fisker hopes to partner with Volkswagen

Fisker said it has been in talks with Volkswagen AG /zigman2/quotes/203434344/delayed XE:VOW3 +1.17%  to use the German auto maker’s EV platform.

That partnership is “under negotiations,” but terms are worked out and an official announcement is expected in the second half of the 2020, Fisker said. The companies signed an MOU for the platform sharing in November 2017.

That sharing arrangement would allow Fisker to enter the market in half the time and with “substantially reduced” costs, Fisker said in an investor presentation.

Volkswagen could also supply parts and components to Fisker, giving the company access to Volkswagen’s deep supply chain and all the pricing and quality advantages that comes with it.

Perhaps having learned a lesson from the A123 Systems debacle, Fisker said it also plans to tap into Volkswagen’s battery supply, reaping the benefits of “one of the world’s largest battery procurement supply contracts.”

What comes after the Ocean SUV?

The Emotion, a luxury sedan, is waiting in the wings, with no firm launch date yet.

The Emotion has had a longer life, however, than the Ocean.

It was unveiled at CES 2018 and like the Karma years before it, the Emotion has been hailed as the one to give the Tesla Model S a run for its money.

Fisker said it aims to use “new electrification technology that is currently in development” in the Emotion, without offering further details.

The company is going public at a strong time for the IPO market. The Renaissance IPO ETF /zigman2/quotes/207665280/composite IPO +2.03%  has gained 36% in the year to date, while the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.31%   has fallen 1.5%.

/zigman2/quotes/208911460/composite
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$ 19.81
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Volume: 63.25M
Dec. 8, 2021 4:02p
P/E Ratio
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Market Cap
$79.76 billion
Rev. per Employee
$683,570
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5.08
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2.09%
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€59.00 billion
Rev. per Employee
€819,956
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US : U.S.: OTC
$ 18.39
+0.07 +0.40%
Volume: 3,585
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P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.13 billion
Rev. per Employee
$334,989
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XE : Germany: Xetra
186.50
+2.16 +1.17%
Volume: 569,714
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P/E Ratio
5.25
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2.61%
Market Cap
€113.40 billion
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€336,391
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US : U.S.: NYSE Arca
$ 60.71
+1.21 +2.03%
Volume: 83,635
Dec. 8, 2021 4:10p
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US : S&P US
4,701.21
+14.46 +0.31%
Volume: 2.16B
Dec. 8, 2021 4:59p
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Claudia Assis is a San Francisco-based reporter for MarketWatch. Follow her on Twitter @ClaudiaAssisMW.

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