Collaboration in the automotive industry is on the rise, with the electrification megatrend on the driver’s seat. The latest example is California-based Fisker Inc, an electric vehicle (EV) maker that’s looking at launching its maiden product, the Ocean SUV, by late 2022.
Fisker has decided to merge with Spartan Energy Acquisition Corporation, a special purpose acquisition company sponsored by an affiliate of Apollo Global Management. The parties have entered into a definitive agreement for a business combination that would result in Fisker becoming a publicly listed company at the New York Stock Exchange (NYSE).
Under the merger deal, Fisker is valued at $2.9 billion (Rs 21,000 crore). The boards of directors of both Spartan and Fisker have unanimously approved the proposed transaction, which is expected to be completed in the fourth quarter of 2020, subject to the receipt of all mandatory approvals.
Based in Los Angeles, California, Fisker Inc, which aims to create a space for itself in the highly competitive automotive industry as the ‘world’s first digital car company’ with an ambition to develop ‘the most emotionally desirable and eco-friendly EVs on Earth’, supported by advanced mobility solutions. The proposed transaction, which will provide over $1 billion (around Rs 7,500 crore) to Fisker, will help the company to bring the Fisker Ocean to production in late 2022.
India is also seen as a prospective market for the electric SUV. Unveiled first at CES 2020, the Ocean apparently received bookings from consumers in India too. The EV maker has registered its trademark in over 20 countries.
Commenting on the new development, Henrik Fisker, founder, chairman and CEO, Fisker Inc. says, “We are excited to partner with Apollo, a world-class financial institution who brings deep industry expertise, extensive global relationships and a shared commitment to ESG. This vote of confidence from investors, coupled with our exciting progress on the development of our first vehicle, lays out Fisker’s path to 2022 and beyond.” He adds that the company’s funding, product plans and brand development actions “are on course.”
In an exclusive interview (https://youtu.be/Jdvdcr_RYzY) last month with Autocar Professional, the automotive designer and serial entrepreneur had shared the broad strategies, including collaboration, to build the EV business and how India could grow as a major EV market globally where the Ocean SUV could be one of the players.
Potential partnership with Volkswagen
The EV industry is yet to gain the critical volume, and that makes it a stronger case for companies to collaborate and save time and costs as they build their businesses. These are the factors which are also driving Fisker to negotiate with global major Volkswagen for a partnership, according to an SEC filing.
It is to be noted that VW is already making big efforts to be a key player in the emerging EV industry too. Its MEB EV platform is expected to spawn a series of models till 2025. If negotiations are successful, Fisker will be able to tap Volkswagen’s EV component quality, pricing, and supply chain. The Fisker Ocean prototype, showcased at CES 2020, is reported to have been built on the MEB platform.
Fisker’s prototype vehicles are expected to start durability testing by the end of this year. The EV player is looking at building a highly asset-light and low risk business model, with a target of booking profit from the first unit onwards. Along with a platform sharing strategy, a shared manufacturing model is also being worked upon to be able to profitable from the start, and have a sustainable business journey.