In the intricate landscape of electric vehicles (EVs), California-based startup Fisker Incorporated experienced a crucial year in 2023 marked by production milestones and delivery challenges. In spite of successfully manufacturing more than 10,000 units of the Ocean EV, the automaker encountered a number of hurdles that prevented it from delivering nearly half of those units to customers. To be more specific, the company could deliver only around 4,700 units to customers.

The aforementioned discrepancy, valued at approximately $290 million for undelivered vehicles already paid for by customers, prompted the automaker to reconsider its distribution strategy.

The direct sales approach, which is a cornerstone of Fisker’s initial strategy, struggled a lot to translate its production success into timely deliveries to customers. To address this, Fisker is pivoting towards a dealer-partner model, with an aim to clear the backlog and streamline operations in the first quarter (Q1) of 2024. This strategic shift reflects a commitment to enhancing efficiency & responsiveness in meeting customer demands.

Fisker’s production journey of 2023 unfolded with it recalibrating its ambitious targets. Originally envisioning approximately 42,400 units of EVs, the startup revised expectations multiple times, concluding the year with slightly more than 10,000 units produced.

Henrik Fisker, the founder of Fisker Inc., acknowledged the intricacies of the market, citing challenges related to high rates of interest, expensive real estate, and training difficulties. As a proactive response, the company is now embracing the dealer franchise model, garnering interest from more than one hundred potential dealers in the U.S., Canada, and Europe. Recognizing the need for adaptability in the fast-evolving EV landscape, the company aims to strike a balance by utilizing both dealer partnerships and a direct sales approach.

Speaking on the topic, Fisker said, “I think we just went that route because everyone does when you are a startup. I went to my accounting department and asked what is the cost of selling a car? We decided we would rather give that money to a dealer so that we could expand faster.”

Despite the challenges, Fisker maintains an optimistic outlook for the dealer franchise model. To catalyze this transition, the company is hosting dealers at its Manhattan Beach headquarters, presenting an opportunity for engagement and collaboration.

As Fisker reevaluates its distribution strategies to get vehicles to customers in timely manner, it remains focused on bringing out innovative EVs. With the dealer-franchise approach taking center stage, the startup envisions propelling growth in 2024 to strategically position itself in the competitive landscape of electric mobility, heralding a new chapter in its electrifying journey.