Fisker Inc. (NYSE:FSR) Q3 2023 Earnings Call Transcript

So far, we have four waves of updates deployed on vehicles in the U.S and Europe, two of which have successfully been updated on over 2,000 cars to date. And it should be noted that this is all in-house capability. And I’d like to give a shout out to our engineering team. Their competence and dedication has allowed us to develop an incredible first product at a very rapid rate. Having such an impressive team completely owned in-house is a key component of our Fisker strategy. Our ongoing investment in great people and processes, means our OTA updates will further improve in speed and efficiency, allowing us to deliver our roadmap of new features and functions on a regular basis. Over the next few months, we will be rolling out updates that include energy data on the solar sky roof, adaptive drive control with radar cruise control, auto-hill hold and several others.

Now let me update you on PEAR and Alaska. We have been investing to build great competence in Computer Aided Engineering or CAE, which allows us to accurately test almost all aspects of the vehicle virtually, reducing development time spent on crash safety, NVH, dynamics, powertrain, digital performance and other testing. Everything we’ve learned from the Ocean program is being embedded and enhanced. And we are now using this for the next programs allowing us to dramatically reduce development time. So much so that we are already entering the prototype phase for Alaska, where we will build a fleet of fully representative vehicles to generate physical test data to validate our CAE results before moving to production release. And the PEAR as was announced the August 3 Product Vision Day, will feature our own new Blade central computer, which will deliver 6.2 teraflops of compute performance with seamless 5g and Wi-Fi connectivity.

We are excited to preview a short demo of this functionality during the LA Auto Show later this week. Not only are we hard at work on the future high volume programs, but my small team in the U.K is busy developing several exciting niche projects, including the foresee off road package for Ocean. As an off road enthusiasts and ex rally driver myself, I’m particularly looking forward to testing the Force E very soon. I think it’s going to be quite a beast. Just in wrapping up, I know from personal experience of driving an Ocean Daily for the past 3 months that we have created an outstanding vehicle. I’m very proud to have played a part in all our top talented team has accomplished in-house and with our world class partners to deliver the Ocean to market.

But I’m now even more proud to step up to lead the technical team into our next exciting phase of product development. Thank you. I will now turn the call over to Geeta.

Geeta Gupta-Fisker: Thank you, David. I would like to begin by expressing my gratitude to the entire Fisker team, all our suppliers and our customers who are with us on a very exciting journey. The creation of a worldwide electric vehicle brand and the launch of a new vehicle involves intense dedication and concentration and a team working tirelessly across all hours. And it truly is accelerating to witness the initial results of our efforts as more and more Oceans find their way into driveways across U.S and in 9 European countries. It seems like it is only yesterday that we started developing the program. To a nine calendar months in 2023, it is remarkable the achievements we have made as a company. Beginning with approval to sell the Ocean in both North America and Europe, we have now produced 1,000s of vehicles, and we’re well on our way to delivering them across a broad array of markets at a scale and pace at which no other EV company has expanded.

As we have seen an increase in our production ramp, and with a stabilized supply chain, our focus for the remainder of the year is on our software rollout, our service and delivery network. Our goal is to shrink the time between production of the vehicles and delivery so our customers can enjoy the world-class Fisker Ocean as quickly as possible. Let me provide you with an update on vehicle production and deliveries. We continue to make great progress and ramping up vehicle production, including ensuring there is a steady supply of parts from our suppliers, including the impact from summer shutdown in August, 4,725 vehicles were produced in Q3. And that’s from 1,022 in Q2, a production ramp up to the tune of 430%. With the production process hitting its stride, our tough priority has moved to supporting the growth and scale of our outbound logistics, delivery network, launching multiple sites across EU and North America for preparing vehicles with latest software for delivery to our customers.

In the third quarter, we delivered 1,097 vehicles up from 11 in the prior period, and almost 10,000% increase. Let me provide some additional color on the delivery cadence during Q3, which grew from 86 vehicles to 279 vehicles in August to 732 vehicles in the last month. During 3Q, delivery efficiency was impacted by a variety of items that we are already improving. What we faced are logistical challenges as we ramped our truck and last mile transportation partnerships. And we streamlined our processes, which were compounded by a limited charging infrastructure at various processing centers. And in order to alleviate them, we are now adding mobile charging and static skids. And in addition to that, we also had some real estate constraints. On real estate, we experienced COVID delays, which impacted the timing of our permitting and construction schedules.