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Fisker debuts on the NYSE

Electric automaker Fisker completed its new spac merger and debuted at the New York Stock Exchange on Friday. Henrik Fisker, Fisker Inc. Chairman and CEO, Yahoo Finance’s Myles Udland and The Final Round panel to discuss the new IPO and what to expect from the company.

Video Transcript

MYLES UDLAND: With everything else going on in the market this year, one of the most interesting trends we have seen is SPACs. These are special purpose acquisition companies. They come to market, they buy a company that already exists, and then voila, we have a new publicly traded vehicle. One of those completing their SPAC today is Fisker, and we're joined now by the company's founder and CEO Henrik Fisker. Once again, Henrik, thanks for coming back on the program here. You guys closed out your SPAC, I guess is the way that you would say that officially, so you've come to the public market. I guess, let's just start with the process as it's been for you guys over the last couple of months, you know, getting that deal complete, and then sort of working with your partners there to bring this company to market, and as you outlined kind of in your release here, having enough liquidity now for the next couple of years to get that Fisker Ocean program all the way through.

HENRIK FISKER: Yeah, thank you. It's great to be on the show. You know, as we started this SPAC, it was about August, and one of the things we did, we also raised a pipe. So on top of the SPAC itself, the SPAC itself was about $570 million, and then we raised on top of that $500 million, because we had a lot of interest from investors. So we were able to close actually over a $1 billion yesterday, and we are trading today FSR on New York Stock Exchange. And what it really allowed us to do was to get money enough, as you mentioned, to get all the way to production with our first vehicle to Fisker Ocean, and that really helped de-risk, I think, this venture.

And secondly, because we have this type of financing, we're able to basically strike a deal with the world's third largest supplier, Magna, that's a manufacturer of vehicles. You know, we have a little bit more-- we have a complete different business model, I would say, than anybody else out there in terms of having this deal with Magna. And you can kind of compare a little more if you think about Apple and Foxconn where Apple design and develop the phones, but they don't manufacture them, and that's kind of how we are set up as well.

MYLES UDLAND: And then, you know, as you're talking, I realize maybe we should back up a half step here and kind of outline maybe for the audience who isn't as familiar with, you know, Fisker's plan here, what your timeline looks like for getting a vehicle on the road. I understand you have 9,000 reservations for that car, and then beyond that first vehicle, I believe you'll have three vehicles by 2025.

HENRIK FISKER: Yeah, you know, we have taken, I mean, it's a very different path. Our objective is to bring the most sustainable and emotional vehicles to market for the right price, and that's very different to a lot of the other EV startups that starts with, you know, over $100,000 cars. I've already done several cars like that, both from traditional OEMs like BMW and Aston Martin, and I also did the original Fisker Karma, which were $100,000 vehicle. But at this point, I think that the real excitement in this market is around, you know, the sort of lower premium segment around $40,000, that's where the big growth potential are.

So our first vehicle is going to start as 37,500. What's also unique about this vehicle is it's actually an SUV. It looks like an SUV, it doesn't look like a hatchback or a fastback, so I think we have a unique market position here as well as many different features in the car itself. And I think that's the excitement we have seen two years ahead of launch that we've got a lot of reservations. So you know, we're very excited about bringing this vehicle to market and of course, a few other vehicles as well.

MYLES UDLAND: And then obviously, there's been a lot of excitement around electric vehicles, and we all know the names in that space. But thinking more broadly about what we've seen in the auto market because of COVID, huge demand for vehicles. Used vehicles particularly been flying off the shelves, but obviously, new vehicles have done quite well in addition to that. Has that changed your plans or your bullishness I guess on the overall space, maybe the newfound appreciation or desire for consumers to have vehicles after the last decade kind of saw this sharing economy meme really make its way into the conversation.

HENRIK FISKER: No, I mean, we have seen a spike in our reservations actually during COVID. Now also, we decided to go fully digital already last year, so we have a proprietary app. You can only reserve our vehicle over either the app or on our website, and we are planning to stay completely a digital car company. We'll deliver the card home at your office. We'll pick it up for service. You never have to take this car to service. You'll do everything through the app, also insurance, et cetera, so we are kind of moving into I think that new digital economy that's sort of have accelerated during COVID. And I think the second thing that's accelerated is probably, you know, people's desire to actually do something to help the environment.

You know, we have seen how clean the air can become when we don't have all these gasoline cars on the street, so I think you're going to see electric vehicles really expand. Specifically, I would say what you see in Europe there is a lot of new deflation that's promoting electric vehicles, and I see the same in China. And it's a global industry, so if you see that wave of electric vehicles coming in other countries, it'll automatically happen in the US, because you know, one of the weak points generally has been there hasn't been enough choice in the electric vehicle space. In fact, in some type of vehicles, there's only one choice, and that's a Tesla. So I think people want alternatives, they want choice, and that's what we're here to bring.

SEANA SMITH: Hey, Henrik. It's Seana. What's the timeline of that though? Is this something that we could expect in three to five years from now, or is this something that could take maybe seven to 10 years, maybe even 15 years down the road?

HENRIK FISKER: So I believe that we're going to see the biggest explosion of growth on the EV market around '23, 2023, so in about three years from now, and why is that? It has to do with several factors. First, we're going to see some pretty complete infrastructure build outposts in US and Europe and China when it comes to charging infrastructure. Secondly, there's going to be more choice for the consumer. Third, we're seeing battery pricing going down. We, for instance, have partnered up not only with Magna, but we also are using a platform that's shared with another OEM, and that means we get volume right away.

So one of the issues with electric cars has been nobody's volume except for Tesla, so it's been very hard to get the cost down. We're going to launch our vehicle in Q4 2022, and I think that's exactly the right time when we're going to see that growth in a market. I mean, if you think about it, there's 80 million gasoline cars produced a year, or cars or vehicles, and out of that, less than two million are electric. I believe by before 2030, more than half of all vehicles sold will be electric, so the market opportunity is obviously huge, and there's room for a lot of players.

DAN ROBERTS: Henrik, Dan Roberts here. Just to play off that, I was going to ask you of how long it's going to take for EVs to really hit a saturation point in the US, and it sounds like maybe some markets outside the US will move faster, but I know we just discussed that. I mean, really there's also kind of a mental divide, isn't there? I mean, I know a lot of people say, well, I'm not ready to do that, because there aren't enough charging stations. It's a little bit of chicken and egg problem. I mean, what kind of things have to change in terms of the perception that people have of EVs in the next few years. That 2023 date sounds very optimistic to me.

HENRIK FISKER: You know, I think it's all about education, and unfortunately, cars are so expensive that people don't change them as fast as we do for instance with phones. And if you think back when Apple launched their phone, it took a while for a lot of people to actually say, wow, I'm going to get a phone with no buttons on it. But eventually when that happened, that just slided so quickly. Another example would be manual transmissions. So today, you can barely find a car in America that's a manual transmission. In other countries, you know, there's still more than half of all cars are sold are manual transmission. So what happened was the industry basically said, there's no point in offering both manual and automatic when we are going so fast into what's automatic, so eventually they just dropped the manual transmission.

So I think what you're going to see is that automakers will start dropping gasoline cars very quickly, just what happens with sedans. You know, you can look at Ford. How many of their sedans they have dropped. I don't even know if that one left. So, you know, market will shift very quick once you see that exact inflection point, and I think that inflection point is going to happen somewhere around 2025 where you're going to see some car makers just deciding, you know what? We're not going to invest any longer in new gasoline cars, because we're going to lose on that investment. But don't forget, it takes three to four years to develop a car, and if you do it from ground up, several billion dollars, and you need a return on that investment.

So and then you're going to see all the several startups that's going to make it hopefully. You know, we'll be there with four vehicles to offer before 2025, and you know, our customers are going to come from somewhere, you know? And I hope they're going to come from, you know, gasoline vehicles, which means they're going to be so less gasoline vehicles, and that's another driver to start dropping some of those vehicles that probably will see the volume go down.

MYLES UDLAND: I mean, Henrik, as you were talking, I remember my father telling me, it's so important to learn how to drive a stick, and of course, that has never once been relevant in my life as a driver over the last 15 years or so. All right, Henrik Fisker, CEO of Fisker, now trading on the New York Stock Exchange. FSR is the ticker. Henrik, thanks so much for joining the show, once again, we'll be in touch.

HENRIK FISKER: Great to see you guys. Take care.