Fisker Inc. CEO Henrik Fisker joins Yahoo Finance Live to discuss starting production for the Ocean electric vehicle, supply chains, recession, manufacturing hurdles, and more.

Video Transcript

AKIKO FUJITA: Well, after two years in development, production has started for Fiskars all-electric SUV the Fisker Ocean. The vehicle started production in Austria. And with two trims already sold out in the US, the company expects to manufacture over 60,000 EVs in 2023.

For more on this, let's welcome in Henrik Fisker, Chairman CEO and Founder of Fisker Inc. We've also got Pras Subramanian, our autos reporter. Henrik, good to talk to you. The long-awaited bell. You finally got it at the New York Stock Exchange.

But just for those who aren't as familiar, obviously, you went public during the pandemic. You didn't have an opportunity to get out to the NYSE. But let's talk about what the demand picture looks like.

More than 60,000 reservations. You expect more than 80,000 by the end of the year. Talk to me about why you think the Ocean is the one that can break through in a crowded field of EV.

HENRIK FISKER: Well, first of all, we designed to Fisker Ocean to have at least four features that nobody else have, all best-in-class. So for example, it has 350-mile range. That is the longest range of any SUV or crossover in our price segment.

We also have what we call California mode, where you can lower all the windows. Not just the windows in the doors, but the rear 3/4 windows-- we call them doggy windows-- the rear window, and open up, which is also the largest solar roof in the world, where you can get up to 2,000 free miles.

But most of all, it is the world's most sustainable car. We have over 50 kilos or 100 pounds of recycled and biodegradable materials. For example, most of the materials inside the car is made of recycled plastic bottles.

So I think that really resonates with people, not just going EV but actually buying the world's most sustainable car. So we have seen an incredible uptick. We had calculated a hope for 50,000 reservations end of this year. We are now over 63,000. So we are looking now at expanding manufacturing also into the US.

PRAS SUBRAMANIAN: Hey, Henrik. Pras here. Congratulations on the bell ringing today. So with the start of production happening last week, are you guys seeing an even more uptick here for reservations? And how does that impact you when it comes to production and things like the supply chain crisis?

HENRIK FISKER: Well, so we worked through the supply chain crisis this year. We have actually now seen all the suppliers in a much bigger state than even they were three months ago. I kind of feel like we were in a recession and we are getting out of it.

I mean, my prediction is that we are going to be out of a recession by mid next year. So we are seeing our suppliers coming back. We have a slow ramp up in Q1 next year, to make sure all our suppliers come with you.

But we are planning a total of 42,400 cars next year, which is quite a lot for an EV start up. Probably double as much as anybody else has ever done. So that is, of course, because we are working with Magna Steyr, which is the biggest contract manufacturer of cars in the world and they know how to ramp up.

Our suppliers have been selected together with Magna. So we have actually diligence all our suppliers. And quite frankly, they worked really hard with us to get up to speed.

So at this point in time, we don't see any supply chain issues. We are actually looking at seeing how can we increase our manufacturing because we actually have more demand, like I said, than we counted on for the Fisker Ocean.

AKIKO FUJITA: Henrik, the last time we talked to you, it was right after the Inflation Reduction Act had been passed, setting aside incentives to prioritize production in the US. Now, it sounds like you are considering US production of the Ocean vehicle specifically. To what extent has the incentives in the IRA made that a little more attractive and what are the options you're looking at right now?

HENRIK FISKER: So we had actually already planned in Q1 this year to look into US manufacturing because we saw this rise in reservation. And we have seen even more extreme raise in reservation even in the last month. Maybe it's because there's more awareness. Maybe because people really now are thinking seriously about EVs.

I think the Reduction Act, of course, if that goes into effect, we want to be part of that. I do believe that there's gonna be some consideration to delay it for a couple of years, because you know, it was announced in August that in January '23, it's gonna take effect. But the truth is, nobody can build a factory in six months. It takes a couple of years.

So I think now we are seeing Japan, Korea, and the European Union objecting to it. And hopefully, there's gonna be some reasonable negotiations. If not, we're sold out in the US next year. So it doesn't really affect us if we get manufacturing up and running in '24. I just see that as a positive.

And OK, we might have last quarter next year where there's gonna be some effect. But again, we are also competing with cars out of Japan, Korea, and Europe, and they also don't get the incentive. So I don't think it's gonna have a real big impact. And we have definitely not seen any negative impact in the rise of our reservations.

PRAS SUBRAMANIAN: Hey, Henrik, looking ahead to what's next, the pair-- the compact SUV, I believe, is what it's going to be. You guys have around 5,000 of those on reserve right now. Also looking at building that at the Foxconn plant in Lordstown, is that correct? Is that-- how is that-- how is that going, that ramp up?

HENRIK FISKER: Yeah, so we have full speed on that, getting ready in Ohio for that vehicle. I'm actually amazed we have 5,000 reservation because we haven't even shown the vehicle yet. We have just said it's going to be priced under $30,000. And it's still going to be priced under $30,000.

I'm getting more and more excited about this vehicle because it's really going to be a disruptive, I think, game-changing vehicle. Not only because of the price but because of the features this vehicle have.

It's made for way beyond, just as a passenger vehicle. It's made for ride-hailing, food deliveries, et cetera, et cetera. So it has unique features that make it perfect to actually reach a more broad-oriented audience. We have also in the middle of creating a very unique decontended version that we are planning to build in India.

So we are really looking at disrupting specifically the affordable EV market, as everybody is pricing the EV new vehicles into the super high-end luxury segment. Even normal brands, the US normal, I would say, mainstream brands are making $80,000 to $100,000 EVs. And in the end of the day, we are going to run out of customers that can pay $80,000 for a car, any car.

So I think we're doing the right thing going into a market, which is sort of being rejected by the carmakers right now. And I think that's gonna give us a huge lead in the next two or three years.

AKIKO FUJITA: Well, certainly an exciting day for the company, Henrik. Good to see you finally made it to the New York Stock Exchange. Was that a cowbell, by the way, that you were ringing earlier? Do you still have that?

HENRIK FISKER: Yeah, it was a cowbell. We have a vegan interior but we do have a cowbell.

AKIKO FUJITA: OK.

[LAUGHTER]

Good to know, Henrik Fisker. Good to always have you on the show. Appreciate the time. And our thanks to Pras Subramanian as well.