Electric carmaker Fisker to go public in $2.9b deal

Fisker announced it would merge with Spartan Energy Acquisition Corp. in a deal that would value the company around $2.9 billion. Fisker Inc. Founder and CEO Henrik Fisker joins The Final Round panel to discuss the electric car industry amid the coronavirus.

Video transcript

- Henrik, great to have you back on the program, and I want to start with the news that you guys will be making your way to the public market through a special acquisition SPAC vehicle. We've heard a lot about these recently, and I guess just kind of bring us up to speed on where Fisker is at and how you guys have navigated what's been quite a challenging few months since we last spoke.

HENRIK FISKER: Yes, so we have we have finalized our deal so far with Apollo and their Spartan SPAC. And we have raised a little over $1 billion. We did get in $50 million in private financing just before we announced the SPAC from Hudson Bay. And we got some pretty good large funds like, BlackRock, part of the SPAC.

It was a $569 million SPAC. We were well oversubscribed, with over $700 million. We decide to take $500 million, originally it would have been 350, so that gave us a little over a billion, which essentially means we are fully financed until startup production with our Fisker Ocean, which you see there to the left.

And what's really unique about us is we are concentrating on actually driving value to the customer rather than just trying to make everything ourself. And I truly believe if you want to have profitability and value for money over the next five to seven years, you have to get volume. And you can only get volume by sharing parts. So we're in late discussions with Volkswagen in doing that. There's obviously, the world's largest car maker. They have some fantastic new technology called MEB, and we have based our first vehicle, this vehicle you see here, the prototype was actually built on top of the MEB skateboards, so to speak.

And we think this is the way forward to really get faster to affordable vehicles, ours obviously a premium vehicle. But if you think about it you can buy this vehicle for $29,999 after the $7,500 federal tax discount. You know, that's cheaper than a Toyota Rav Four hybrid. So it's a pretty good deal.

DAN ROBERTS: Henrik, Dan Roberts here. Obviously right now with Tesla's stock ride and then the hype over Nikola, there is a lot of attention on this space. And I guess the thinking would be that that's great for you guys, the timing is great. I'm just wondering if you think the sort of attention and hype has any drawback to it, and if it can make the company look at all like it's kind of yet another in this current wave.

And related to that, I wonder was the SPAC route the plan all along, pre-pandemic, or once you saw what was happening it became clear that that's the way we should do it because then you skip the road show, and especially with everything going on, it's a little less of the fanfare?

HENRIK FISKER: Well first of all, I think all the attention is great, because it makes consumers aware that electrification is coming. Electric vehicles are becoming so good, in fact, better than gasoline vehicles, so the market is expanding. So I think that's positive for everybody. I also think of course there's some hype where a lot of companies has been coming forward saying they're going to do this or that, making some amazing vehicle, but it's turned out most of them just weren't able to. I've been almost 30 years in the car business. It's an incredible difficult business. Most people who's never been in it probably overestimate it, and you've seen that with some of the failed EV startups out there lately, that never brought a car to market.

We have brought a car to market once in the past, the Fisker Karma. This time we are looking at it from more of a business model perspective. And that's really why we chose the SPAC, because having tried to raise private money before, I don't believe that it's the effective way to do it when you are in such a capital intensive industry. So we started the SPAC discussion three, four months ago. However, in the last couple of months, due to the market excitement around SPACs and electrification, we were suddenly approached by multiple SPACs, and the Apollo SPAC really was the best one. They had a great name. Was the right size SPAC. Great management team. And we really felt this was the best for all the stakeholders in Fisker, really could guarantee to bring in some great investors, which really happened.

But the idea of the SPAC had really been an idea already starting last year. But we had to get our prototype done first to truly make it happen. Now in terms of roadshows, I will tell you, this might be worse in the pandemic than it would have been if I would have been able to take a break on a plane in between the meetings, but right now, you know, we're having 12 meetings a day with no breaks. So it's been a bit crazy.

- Although I look at your background, Henrik, and I certainly feel relaxed. So maybe the meetings stack up nicer there. Let's talk a little bit quickly about your kind of talking customer here, and what changes you've seen in the auto market just in the last few months. I mean, we've talked to executives from Carvana and some others in that space about the way that expectations for buyers have shifted radically here. Do you see that as a tailwind, if people don't feel the need to go to a dealer and test drive a car, they're comfortable kind of getting these things done online?

HENRIK FISKER: Well first of all, we launched our digital app last year, and it's been an amazing reception. You know, our company is going to be the world's first digital car company. We're going to do everything digitally. We are going to deliver your car at home, just like if you ordered something from Amazon. We're going to pick up your car for service. You don't have to do anything. This is a no hassle service.

We even have developed first, a very unique lease. It has never been done before for new cars. It's a flexible lease. You can lease the vehicle, give it back anytime, after a month, three months, two years, doesn't matter. So we are really adapting to, I think, what is the future consumer, automotive consumer. And I think, I honestly believe that the next generation, specifically the younger generation of car buyers, whether they lease or buy, they're also going to look at what does this company do for the world? Are they helping the world?

So ESG is a big thing for us. We have a very diverse board. We have three women on the board. By the way, my entire design team is only women. Which is great. So you know, so it's-- we're very diverse. And also, we are making the vehicle the world's most sustainable vehicle. All the carpets in our vehicle is made from recycled plastic bottles and fishing nets from the ocean. So you know, that's a-- I really think that the new consumer wants new ideas from the car makers. They want new options where they don't get tied into three year leases. They want lower insurance. I think value is going to be a big deal even. In the premium segment, people is going to want value for the money.

They are going to want to see that the company follows ESG, really tries to improve our world. You know, our vision is a clean future for all. And I think we saw some of that happening during COVID, where suddenly people in China could see the blue skies, people in Venice suddenly saw fish in the channels. You know, we want to make that happen, and we can only make that happen if we change the way we make our products. And you know, we have to do that, we meaning the car industry have to do it. There's nobody else that can do it.

- Yeah, Henrik, just thinking about your counterparts here, and of course, in addition to ESG and wanting to be sustainable, there seems to be a cult of personality, when you think about Elon musk at Tesla or even Trevor Melton at Nikola. Are you in conversations with any of your competitors, and what's your analysis here when you look at the correlation between some of these charismatic leaders who are very outspoken, and sort of the success and buzz around their companies?

HENRIK FISKER: Yeah, you know, I know both. I know Elon from the past, but now we are fierce competitors, so it's not like we're talking too much together. I know Trevor. I in fact just talked to him, I think, a couple of days ago. He just gave me a call to congratulate what we're doing. Known him for a while as well.

You know, I think it's very important that leaders of these new startup companies really do something else then probably we were used to with the traditional car companies. And we have the ability to do much more. It's more difficult for a traditional organization to move as drastically as we can do. But I think it's really our duty to truly do something that moves forward this industry. You know, it's one of the-- traditionally one of the most polluting industries in the world. And we need to do something about it. And that's what I'm here to do. That's my calling.

But I still think people want to drive a cool car. You can't stuff down the throat, you know, people some ugly, dorky looking car. It's got to be cool. It's got to be great. You know, and that's what we're doing. I believe emotional design is still playing a huge role. You know, I used to design Aston Martin and BMWs and other sports cars, and you know, we want to bring that emotional design into the premium segment of sort of $40,000 to $60,000, and that, you know, I think that's going to be a big driver for people to go fully into sustainability. And there's no loss. This car is going to be amazing.

- All right, Henrik Fisker, Fisker founder and CEO. Thank you so much for joining the program. Congratulations on the SPAC. Hopefully we'll be in touch shortly here in the next few months.

HENRIK FISKER: Thank you. Good to meet you. See you guys.