Should You Buy a Fisker Ocean in 2024?
Proceed with caution: Financial woes put the electric SUV in dangerous waters.
Fisker
QuickTakes:
When embattled electric automaker Fisker Inc. announced a fire sale on its Ocean SUV beginning March 29, it set up an intriguing question for bargain-hunting consumers: Are price cuts of up to $24,000 an irresistible temptation or a trap?
Noted Danish car designer Henrik Fisker launched a second bid at becoming a Tesla rival in 2016, and hopes ran high. The Fisker Ocean SUV went on sale last year, combining eye-snaring style and surprising stamina with up to 360 miles of estimated electric range. Memories of the Finland-built Fisker Karma plug-in hybrid — which left U.S. taxpayers on the hook when Fisker went bankrupt in 2013 — seemed to fade.
Those memories have been revived by Fisker's current perilous financial straits. The New York Stock Exchange suspended trading company stock when "abnormally low" prices fell as low as 9 cents a share. A hoped-for financial lifeline from Nissan failed to materialize. And the California-based automaker warned of a potential default in a Securities and Exchange Commission filing from March 2024.
"There is substantial doubt," the company wrote, "as to our ability to continue as a going concern."
The automaker paused production of the Ocean, built under contract at Magna Steyr's factory in Austria, for six weeks in March 2024 as the brand worked to keep the lights on.
Fisker
Fisker Slices Prices to Less Than $25,000
This all comes as Fisker announced nearly unprecedented price cuts on 2023 Ocean models to jump-start sales. The top-shelf Ocean Extreme, with up to 562 horsepower via dual motor all-wheel drive, saw its price chopped from $61,499 to $37,499. The 2023 Ocean Ultra model will start from $34,999, down from $52,999. And a 2023 Sport version is priced from $24,999, down from $38,999. Those prices do not include a variable destination charge that can crest $2,000.
At those come-hither rates, an Ocean Sport would undercut even a 2024 Nissan Leaf at about $29,000 or a $27,000 2023 Chevrolet Bolt EV (a model discontinued for 2024, though still available on dealer lots as of April 2024).
But analysts are sounding a "caveat emptor" over Ocean discounts of up to 39%. A low, low price won't matter if Fisker doesn't survive, leaving owners with rapidly depreciating cars and few or no options for service, parts, and support.
"As tempting as it sounds, buying a Fisker is not something that I would advise," said Ed Kim, president and chief analyst at automotive marketing research and consulting firm AutoPacific. "The risk is far too high."
If Fisker goes into bankruptcy protection, Kim explained, owners would likely lose warranty coverage. That's especially concerning for what he called "a new and unproven car that's had its share of issues and problems."
Owners and news organizations have already reported problems with the Ocean, including vexing software glitches. The National Highway Traffic Safety Administration has opened an investigation into the Ocean's braking system. The NHTSA is also investigating complaints of an inability to shift into the correct gear as well as faulty latches that prevent doors from opening.
Long-term support raises another red flag, Kim said, especially for a company that has yet to make a transition to a more-traditional dealership model. In January, Fisker announced plans to open as many as 50 stores in North America this year and 50 more in Europe, in combination with its current direct-sales approach.
"Where are the parts and service support going to come from?" Kim said. "That could all vaporize. And if that happens, Fisker owners could find themselves in a sticky situation."
Fisker
Long-Term Software Support Remains a Big Question
Fisker says all discounted 2023 models feature its latest 2.0 software for 2024 models that's designed to address some existing issues, while adding new features such as trailer sway control. The company adds that certain 2023 Oceans boast up to $7,000 in options, such as 22-inch wheels, that are included in the discounted price.
The company wrote in a recent statement: "Fisker is strategically positioning the all-electric Ocean SUV to be a more affordable and compelling EV choice, competitively available to EV buyers in the broadest possible market, and constantly improving via frequent over-the-air (OTA) software updates."
With modern EVs essentially software devices on wheels, Kim said that a lot of what makes a Fisker a Fisker is the ability for the car to improve over time. But those software updates may not be forthcoming if Fisker goes belly-up.
What's worse is that many Oceans were shipped with missing features that had initially been promised to customers and have yet to arrive via updates. This includes adaptive cruise control, a critical convenience and safety feature that's standard on virtually every luxury car, along with many mainstream models.
"If you lose those updates," Kim said, "you're kind of stuck with the car in its current state, which by all accounts is an unfinished car."
Fisker
Finding a New $25,000 Fisker May Prove Impossible
Massive discounts and volatile business conditions appear to be taking a toll on existing Fisker resale values as the market adjusts to a new pricing reality. Automotive inventory information site Edmunds reported that it paid $69,000 for a nearly loaded Ocean Extreme in January and received a used-car appraisal for a dismaying $21,000 in March. That would represent a nearly 70% depreciation in just two months, which equates to roughly five years of depreciation on a typical new car. Electric-car news site Inside EVs reports that Tesla stores are refusing to accept Oceans as trade-ins due to plummeting values.
In its inaugural sales year of 2023, Fisker built 10,142 Oceans for international buyers and delivered about 4,700. Yet, as with many purveyors of all-new EVs, Fisker focused on building its highest priced, most profitable models first to snare deep-pocketed early adopters and maximize profits.
That included a top-of-the-line Ocean One edition that represented the vast majority of fourth-quarter sales in 2023. Kim said it's possible that few if any lower-priced models have actually been built and shipped here.
"This may be a theoretical car instead of an actual one," Kim said.
In a management update in Fisker's SEC filing from March 2024, the automaker said it had 1,168 vehicles in North American ports, 2,140 in storage, 180 still at sea, and 171 cars in Austria awaiting delivery. For those counting, that's 3,659 Fiskers potentially looking for a good home.
