Fisker Inc.

Good morning and welcome to Fisker Inc's second quarter 2023 earnings call. All participants are in a listen-only mode. After the speaker's presentation, we will conduct a question and answer session. To ask a question, you'll need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Frank Boruch, VP of Investor Relations. Thank you. Please go ahead, sir.

Thank you, operator. Hello. Hi, everyone, and welcome to Fisker's earnings call. As the operator mentioned, my name is Frank Borak, VP of Investor Relations and Treasury here at Fisker. Joining me on today's call are Henrik Fisker, Chief Executive Officer, Dr. Bukhar Hunki, Chief Technology Officer, and Dr. Gita Gupta-Fisker, Chief Financial Officer and Chief Operating Officer. Please note that today's discussion includes forward-looking statements about our expectations. Actual results in future periods are subject to risks and uncertainties that could cause our results to differ materially from those projected. These risks include those set forth in the press release we issued earlier today, as well as those more fully described in our filings with the Securities and Exchange Commission. Today's discussion also includes certain non-GAAP measures, including non-GAAP operating expenses. Quantitative reconciliations of our non-GAAP financial information to the most directly comparable GAAP financial information appears in today's earnings release. With that, I'm happy to turn the call over to Frederick.

Thank you, Frank. Good morning, everyone. Thank you for joining us today for our second quarter 2023 earnings call. First, I would like to thank all our stakeholders, teams, and partners for all the hard work and the continuous progress we have made in 2023. The past few months, we have achieved several significant milestones. Our first product, the Fisk Ocean, achieved best-in-class range, providing access to large addressable markets, commenced production ramp-up, and began global deliveries. We also had a large-scale media test event, completed an important financing, and unveiled our future product lineup yesterday. We believe all of these achievements position us well for long-term sustainable and profitable growth. And talking about profitability, I don't know of any EV startup that ever made a double-digit profit margin on the very first cars that we have delivered. And I think that really sets the stage for where we're going in the future. And of course, it's interesting to see that nobody's really mentioning that anywhere in the news. So I think it's very, very important to mention it here. And I know our CFO is going to talk about this as well, because it really highlights our excellent engineering teams, how they executed the ocean, the building materials of that vehicle, and what the possibilities are in the future for this vehicle and for our future vehicles, quite frankly. It's been exciting to get the ocean in the hands of our customers over the past few months, and we look forward to quickly expanding deliveries across our launch markets. The Fisker team and all of our partners are working around the clock to bring the best-in-class oceans to our customers as fast as we can. Now, our direct-to-consumer sales and service network supports exceptional customer experience. Our North American flagship location at the Grove in Los Angeles has completed all construction. We are awaiting final inspection next Monday, and as soon as that is completed, we expect to open the location. I'm really excited to open this store as it truly demonstrates the experience we want our customers to have. In addition to the comprehensive 24-7 digital storefront, we are establishing a growing physical retail footprint to complement the virtual experience. We currently have customer locations opened in Austria, Denmark, Germany, Norway, Sweden, and the UK. And we expect to quickly expand our physical presence to more cities in North America and Europe throughout 2023. Additional upcoming locations include France, Arizona, Maryland, New York, and Tennessee, which will bring current locations to 15. In addition, we have a few dozen other properties in negotiation in North America and in Europe, and they will also come online this year. We have also expanded our internal service capabilities and physical technicians in the field and stationed at our physical locations. We complement our third party service to complement our third party service providers that offer broad geographic coverage in each of our markets. And you can actually see how fast we're able to respond to customers. And I think this really has shown that our Broad service network is working really, really well. We have started our test drives events as well, and we'll extend these to our Ocean One customers who have not received their vehicles yet. And of course, to deposit holders and new customers in North America and Europe going forward. We now have the vehicles we need to start doing these test drives. We have teams ready. And in the last few days, we actually have done quite a lot of test drives. Let's do a little bit of a detailed ocean update here. Our number one priority is launching and ramping a high-quality physical ocean with class-leading features and range. We're excited to have begun initial deliveries in Europe and the U.S., which will be followed by a fast ramp. In Q2, the Ocean Extreme completed U.S. obligations and achieved an EPA range of 360 miles, which is the longest range of any electric SUV in our class. And of course, In Europe, it's actually the longest range of any electric SUV on sale. I had the pleasure actually of being on hand for initial customer deliveries both in Europe and Germany and Denmark last quarter. And we have now delivered Fisker Ocean to customers across four countries and five U.S. states and are rapidly expanding to be in all of our nine launch countries and, of course, many more states here in the U.S. While we are prioritizing deliveries of the Ocean 1 and Extreme trims throughout most of 2023, we are currently working through the homologation process for Ultra and Sport trims. We anticipate customers' deliveries of those trims will begin in the fall, and Bukart will also touch upon that a little later. And I'm pretty excited, actually, that both the Ultra and the Sport also will, I anticipate they will actually also overachieve on the specifications like range, when we get the final certification. So, again, I think both of these vehicles will be best in class and offer more range than any of our competitors. So, this will obviously broaden the entire customer, you know, all the customers that we have available in this segment. The ocean has a large total address in rural market in both Europe and North America. which is where our nine initial launch countries are. But we also have plans to expand into other regions as well. For example, we announced a limited edition deliveries into India, which will commence in Q4 this year, 2023. And we actually see India as a key market for our vehicles, especially the lower price pair that we showed yesterday. And of course, India now is one of the largest car markets in the world, and we expect from 2026 India actually will start accelerating electrification as well. And of course, we have announced that we will open a delivery center later this year in China, and we will start deliveries in Q2 next year in China. All right. On the pair, the pair, the program design and engineering continues to progress well. For those who had a chance to maybe see the real vehicle yesterday, you can see we pretty much finalized the design of this vehicle. It's frozen. The entire concept is frozen. We have made some amazing steps towards creating what I think is going to be the most exciting vehicle of the century, under $30,000. Parts count, which is actually reduced by 35%, is amazing. And I want to congratulate our innovative engineering team to have come up with a completely new body structure for this vehicle. And I'm super excited about that. And that's really one of the reasons we can sell it for under $30,000 and we'll still make money on it. And it is scheduled to be available for sale in mid-2025. And, of course, we continue to work with Foxconn on finalizing plan for an innovative manufacturing setup that we will require for this uniquely engineered pair. And, of course, yesterday we held our product vision day in California, and it was quite exciting. to show all these vehicles. I believe that fundamentally in the automotive industry, it's all about product. It's not just about any sort of car and just making another electric car. We have seen in the past that some electric cars came out, but they weren't really selling. I think we have a fantastic, phenomenal product lineup. And I think the ability to go into some market segments where there's absolutely no competition is going to give us really the potential to catch and to grab a giant part of that market. I mean, if I look at it, there really isn't any electric vehicle under $30,000 today, and let alone any cool electric vehicle. And I think we showed yesterday how cool the pair is. And of course, looking at our pickup truck, the Alaska, that vehicle, which with incentives, It's $37,900. There is no electric pickup truck in that segment. And I don't believe there's any electric pickup truck as cool, as sporty as the Alaska is. And with our versatility we showed in that vehicle with the bed going from four and a half to seven and a half feet is just amazing. We already got a ton of response on this positive response for that vehicle. I think we already got a thousand orders overnight and I hope we're going to keep expanding the reservations when we get the word out about this truck in the future. I see huge potential there. And the good news is that that vehicle has a lot of ocean carryover parts, so we should be able to get that very fast into production. And I believe we're going to have very high profit margins of that vehicle as well. And then, of course, we also showed an expansion on the ocean with the Force E package. which I think is just going to broaden even more the ocean market going into the more hardcore off-road market, which I think is really unique as well because there really isn't any off-road EV in our market segment that is available for people who want to enjoy off-roading. So I'm very excited that we're going to offer that package already in Q1 next year. And then, of course, finally, the Ronin. It's going to be a low-volume car. I think it's really about exploring new technologies in the end of the day. And, of course, it's going to build the brand, which I think is important as well. It's not going to be too big an investment. It's going to be a low-volume, handmade vehicle, probably under 1,000 units. But it's a super exciting vehicle where we're going to showcase our engineering capabilities and creating a vehicle with the world's longest range, 600 miles. So I'm really excited about that as well. Finally, let's talk about sustainability because it is one of our most important brand pillars, if not the most important. So the hard work in ESG continues. We recently published our lifecycle assessment for the fiscal ocean, which is a cradle-to-grave analysis that details the carbon footprint of the ocean. The findings were that the fiscal ocean has the lowest published carbon footprint of any electric SUV. the lowest. So we did really keep to our promise of making the ocean the world's most sustainable vehicle. And it really highlights the unprecedented sustainability through five phases of the vehicle's life, from raw materials to the vehicle's end of use. We are very pleased with the results and believe it shows how sustainability is woven into every aspect of our business and is core to what we stand for at Fisker. We are progressing on the company's targets aligned with the United Nations Sustainable Development Goals that are materially relevant to our company. So I think overall, it's just absolutely been a fantastic week for us, showing all these products, showing for the first time, I think any EV company on the first car sold, a double-digit margin. I think it's huge. We are really expanding and ramping up our deliveries. Yes, we started a bit slow. I think what's really important here is that we can very fast get to our 300 cars production a day, and we will achieve that within the next couple of months. So we are on target for that, which ultimately, when we get to 300 cars a day, it's 6,000 cars a month, and that is overachieving on a yearly production of 50,000, which were our original goal, but we will overachieve on the monthly target already this year. So I'm very excited about the future and I would like to now hand it over to Burkhard, our Chief Technology Officer.