Fisker, the maker of electric cars founded by Danish auto designer Henrik Fisker, is preparing to enter a Chinese market where competition is getting stiffer, following in the footsteps of another stalwart American player, Lucid.
Fisker plans to open a delivery center in China this year and begin deliveries of the Fisker Ocean SUV, its first all-electric model, in the first quarter of 2024, according to the company’s latest announcement. It also aims to start manufacturing in China early next year with the potential to add 75,000 Ocean SUVs to its production capacity.
Owning a facility in China should help Fisker meet some of the “strong demand” it’s received from Europe and the US, prompting it to raise its production target to 42,400 by the end of 2023.
The California-based EV startup has already done some preparatory work building government relationships, which, as we’ve seen in the case of Tesla’s deal with the Shanghai government, is a crucial step for doing business in China.
Fisker’s leadership team recently visited China and met with officials and business leaders in Shanghai to discuss collaborations and opportunities in the region, according to its announcement. The talks focused on supply chains, logistics, warehousing and future production development.
Fisker fits into the luxury segment of the electric vehicle world, which puts it in competition with China’s homegrown premium EV brand Nio. In a market in a price war sparked by aggressive price cuts from Tesla, even Nio, which had previously committed not to join the price war, last week announced a $4,000 cut in all of its products.
Nio is nowhere near the dominant positions of BYD and Tesla. In April, Chinese electric car giant BYD accounted for nearly a quarter of the entire electric vehicle market, while Tesla ranked second with 12%, according to data from the China Passenger Car Association.
Nio ended the first four months of 2023 with sales south of 40,000 units and a 3.4% share of the entire electrical sector, according to the association’s data.
Fisker envisions a brighter future for its expansion into China, banking on both the massive market size and the country’s appetite for international luxury cars. The company seems to be betting on the idea that the super-rich, who have been avid buyers of Audi, Benz and BMW, will look to ABB (characteristically affectionately called in China for its popularity) in the age of electrification.
“First, China accounts for one-third of global car sales, approximately 26 million vehicles in 2022, of which electric vehicles account for 6-7 million, with a share of 25%,” said Daniel Foa, a member of the Fisker Board of Directors in China.
“In 2023 year-to-date, that percentage has grown to around 27%. Second, the luxury and affordable luxury segment is growing faster than the public sectors. Fisker fits into this segment thanks to its unique history, features, and design.”
“China has always enjoyed high acceptance of traditional international brands of high-quality cars,” he added. “There has been a rapid shift to electrification from government policies and consumer behavior alike. Fisker is one of only two global EV-only companies that are viable alternatives to traditional brands.”
Mr. Fisker is no stranger to the Chinese capital market. In 2014, Wanxiang Group, China’s largest auto parts company (which also owns a sprawling web3 investment empire), acquired the assets of Fisker Automotive, the original auto company Mr. Fisker founded and went bankrupt.