Fisker, the electric carmaker founded by the Danish auto designer Henrik Fisker, is gearing up to enter the Chinese market where competition is increasingly cut-throat, following in the footsteps of another brave American player Lucid.
Fisker plans to open a delivery center in China this year and commence deliveries of the Fisker Ocean SUV, its first all-electric model, in Q1 2024, according to a recent company announcement. It also aims to start manufacturing in China as early as next year with the potential to add 75,000 Ocean SUVs to its production capacity.
Having a China facility should help Fisker address some of the “strong demand” it received from Europe and the U.S., which prompted it to bump its production target to 42,400 by the end of 2023.
The California-based EV startup has already done some prep work to build government relationships, which, as we have 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 EV world, putting it in competition with China’s homegrown premium EV brand Nio. In a market that is experiencing a price war sparked by Tesla’s aggressive price cuts, even Nio, which previously committed to not joining the price war, announced last week a cut of $4,000 across all its products.
Nio is nowhere near the dominant positions of BYD and Tesla. In April, Chinese EV and battery behemoth BYD accounted for nearly a quarter of the all-electric auto market, while Tesla came in second with 12%, according to data from the China Passenger Car Association.
Nio finished the first four months of 2023 with sales just south of 40,000 units and a 3.4% share of the all-electric segment, according to the association’s data.
Fisker is envisioning a brighter future for its China expansion, counting on both the immense market size and the country’s appetite for international luxury cars. The company seems to be gambling on the notion that the affluent class, who have been avidly purchasing Audi, Benz, and BMW vehicles, will be searching for ABB (amicably dubbed so in China for their popularity) equivalents in the age of electrification.
“Firstly, China represents a third of global vehicles sales, which is roughly 26 million cars in 2022, of which electric vehicles represent 6-7 million, around a 25% share,” said Fisker’s China board member Daniel Foa.
“In 2023 year-to-date, that has grown to around 27%. Secondly, the premium and affordable luxury segment is growing faster than general segments. Fisker fits right in that segment with its unique history, features and design,” he continued.
“China has always had a high acceptance of high-quality traditional international automotive brands,” he added. “There has been a rapid shift to electrification both from government policies and consumer behavior. Fisker is one of only two EV-only international companies which 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 has a sprawling investment empire in web3), acquired the assets of Fisker Automotive, the original auto company that Mr. Fisker founded and went bankrupt.