Two years ago, Fisker announced a deal with Foxconn to build a sub-$30,000 electric vehicle (EV) crossover in the United States. However, Fisker’s founder and CEO, Henrik Fisker, revealed during an interview with TechCrunch that the deal has not yet been finalized. Despite his confidence that it will eventually come together, Fisker’s comments highlight the complexity and uncertainty of automotive manufacturing deals. Foxconn has a history of backing out of other factory agreements, which adds some caution to the situation.
The agreement between Foxconn and Fisker, signed in February 2021, aimed to produce 250,000 vehicles annually. Although it was not clear which vehicle Fisker would build with Foxconn, the automaker had mentioned the Personal Automotive Electric Revolution (PEAR), an EV designed for cities and urban environments priced below $30,000. By May 2021, Foxconn and Fisker had a signed agreement, solidifying their expectations in writing.
Shortly after, Foxconn made another deal with EV maker Lordstown Motors, which involved purchasing its factory in Ohio. Fisker benefited from this deal when, in May 2022, it reached an agreement with Foxconn to manufacture the PEAR EV at the Lordstown factory. However, issues arose with Foxconn’s agreement with Lordstown Motors, leading to Lordstown Motors filing for bankruptcy and suing Foxconn for “fraudulent conduct.” Despite this, Fisker claims that plans to build the PEAR in the Lordstown plant are still on track.
Foxconn has previously withdrawn from agreements, such as a $19.5 billion deal with Indian company Vedanta. The company also received incentives to build a factory in Wisconsin, but failed to deliver on its promises, resulting in reduced incentives from the state.
Fisker remains optimistic about its PEAR vehicle and finalizing the deal with Foxconn. The company recently unveiled a prototype of the PEAR and aims to eventually produce up to 1 million PEAR vehicles per year at various plants worldwide. Fisker is accepting preorders for the PEAR, and according to a company spokesperson, the ongoing legal dispute between Foxconn and Lordstown Motors does not currently hinder Fisker’s plans to manufacture the PEAR at the Foxconn Lordstown plant.
However, there are still outstanding issues that both Foxconn and Fisker need to resolve. Fisker explains that both parties require more information to determine the exact cost of assembly and make necessary adjustments to the assembly line. Henrik Fisker expects the deal to be finalized within the next three months.
The PEAR’s price point of under $30,000 has yet to be achieved by any other automaker. Fisker has reduced manufacturing costs by minimizing the number of parts needed in the vehicles by 35%. The company also plans to save money by developing its own supercomputers and streamlining the assembly process.
During the company’s Q2 earnings call, Henrik Fisker confirmed that the Foxconn deal is not yet fully resolved but expects it to be finalized within the next three months. Fisker also revealed that the company received around 1,000 orders overnight for its new Alaska pickup, which will be built and sold in the U.S. The company’s strategy is to bring innovative products to market quickly and gain a significant market share.