Fisker Inc.

Hello and welcome to the Fisker Inc. Third Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, again press the star 1. I'll now turn the conference over to Frank Bohrok, Vice President of Treasury and Investor Relations. Please go ahead.

Thank you, operator. Hello, everyone, and welcome to Fisker's third quarter earnings call. As the operator mentioned, I'm Frank Borak, VP of Treasury and Investor Relations. Joining me on today's call are Henrik Fisker, Chief Executive Officer, David King, Chief Technology Officer, and Dr. Geeta Gupta-Fisker, Chief Financial Officer and Chief Operating Officer. Please note that today's discussion includes four 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 mentioned. 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 experience. 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 Henrik.

Thank you, Frank. Good afternoon, everyone. Thank you for joining us today for our third quarter 2023 earnings call. I want to thank all our stakeholders, teams, and partners for all the hard work and continued progress we've made in 2023. The third quarter marks a strong program for Fisker as we continue to ramp vehicle production and deliveries of the Fisker Ocean. Raised additional proceeds through an upsized financing transaction continue to spread our brand with new fiscal facilities, test drives, and pop-up events in several cities across the U.S. and Europe, and adjusting pricing for the three ocean trims. All of these actions continue to position us for long-term sustainable and profitable growth. As our focus shifts towards ramping deliveries, it's incredible to see our product land in the driveways of more and more consumers every day. And I personally met a lot of customers who admire early adopters and supporters of the Fisker brand. We have an amazing production ramp, which has proven its ability to already have manufactured almost 9,000 units. Other EV manufacturers have taken four to five full quarters to achieve, and solid demand. But we have not been able to follow through with deliveries fast enough. People have paid and are waiting for their cars, and some of them are really getting annoyed. And that's something that we need to do something about. So what are we going to do? As we shift focus, we have to focus on ramping deliveries. It's an incredible, so we have to really think about how do we get more real estate? How do we get more people? And that's some of the most important things that we're doing right now. We are basically hiring about 20 to 30 people a week. We are opening new facilities this month. And as you can see, The curve is going really fast up when it comes to deliveries in the last two weeks. We also have more logistic partners. We started out with just one logistic partners and we have actually have multiple logistic partners at this point in time. And all this, I think you will see in November and December a really, really rapid growth in deliveries. How do we continue this strong growth? We have increased our marketing efforts and have just started TV and print advertising. to increase our brand awareness as we want to keep our incredible momentum going. We also have changed our price strategy both in Europe, US, and Canada, and it's working. We are seeing customers' interest moving from ultra to extreme. And even though we don't get the IRA tax discount for our customers, we have a very competitive pricing in the US, and we are seeing ongoing strong demand for our unique product. In Europe, we're even more competitively priced. even lower than pretty much all the chinese segment competitors and of course our european competitors as our own factory is in europe with lower logistic costs combined with our direct to customer sales model all continental europe and u.s markets are up and running so sorry and uk market up and running germany is the strongest market in europe with customers coming from german premium premium brands that adopt the fiscal ocean when i was in germany a couple of days ago I actually asked to call three random customers in Germany, and I wanted to find out why they bought the Fisker Ocean, what was the top reasons. And all three actually happened to come from a BMW car, and they all said it was about sustainability. They wanted to be with a brand that not only made only electric cars, but also had top priority and focus on sustainability. some of the uh some of the features they liked in vehicle above from that was basically the california mode the solar roof and even the tacos trays so that's obviously unique features that nobody else have and i think i think that again put us in a really unique competitive situation let's go to the detailed ocean update as mentioned earlier we are encouraged to have delivered 1097 vehicles in q3 and exceeded that pace in just the months of october and November is tracking even higher. Now that we have filled our outbound logistic pipeline with finished vehicles moving through various stages, we can provide consumers with more accurate delivery estimates and strategically ramp our deliveries. With a demonstrated ramp in production well underway, this heightened focus on our delivery capability will reduce the gap between production and delivery times. We have continued to add sales and service team members to support the strategic focus. Our total number of marketing sales and service employees has increased more than four times since the end of 2022. This remarkable team continues to work around the clock to bring world-class vehicles to consumers. Not only are we expanding into new markets, but also expanding within existing markets. In Europe, businesses are responsible for a large share of vehicle purchases, more than in the US. For example, in the UK, over 50% of new vehicles were sold to businesses last year. Employer fleet programs are quite popular, especially those where companies offer their employees the ability to lease a vehicle with pre-tax money. Fisker is negotiating over 20 agreements with operators in Europe, that will provide broader consumer access to the fiscal ocean and represent a new growth channel for us these agreements could add tens of thousands of potential ocean customers it has been exciting to see the positive feedback and reviews from early customers and third-party sources we also recognize we are continuing to pursue to optimize the user experience and we are pleased to have recently rolled out our first over-the-air software update to address bugs and enhance the driving experience. Very few companies actually have OTA capabilities for in-depth engineering functionality of the vehicle beyond entertainment functions. I'm happy to say that Fisker does. Our new Chief Technology Officer David King will address these updates and over-the-air software strategy further in his comments. Additionally, we launched a series of how-to tutorial videos designed to help ocean owners navigate their way around the Fisker Ocean. Fisker Ocean Max Range Challenge, a competition to see who can lock the longest range to Fisker Ocean, recently concluded. We are excited to see who emerged among the contestants in each country as a winner of our $1,000 prizes and who will be the grand winner of them all and win an all-expense trip out to our manufacturing facility in Graz, Austria. With deliveries already underway in 10 countries, we are poised to rapidly expand in coming quarters. Our deliveries in third quarter of exactly 1,097 cars is the fastest first full-year quarter delivery ramp of any US-based EV OEM. And I want to thank our team for making this all possible. To date, we have delivered over 3,000 oceans, with many more en route to customers and people are still anxiously waiting to get theirs. I know some customers in the U.S. wondered why we already started delivering ocean extreme models in Germany a few weeks ago. Well, we have actually sold out of the ocean extremes in Germany, meaning we have delivered all of the ocean ones in Germany, so we have to start now delivering the ocean extremes. And that's actually quite exciting. that we were able to do it that fast, and we already are seeing strong demand for OCEAN EXTREME. And of course, Germany is the biggest market in Europe, as I mentioned earlier. And now future product updates. In August, we held a product vision day in Southern California, showcasing Fisker's exciting future product lineup, including PEAR, a radical new segment-busting compact SUV designed to capture a large addressable market, Ronin, a luxury sports car, and Alaska in a segment of a zone. Now the several OEMs have postponed their EV programs. This sweet spot is about the size of a Ford Ranger. So Alaska fits right in a new segment where there's currently no EVs. And it's got unique features. Of course, it's got more luxury than the counterparts that have gasoline engines. And it'll have a flexible bed between 4 and 1 half foot to 7 and 1 half foot. And the price is confirmed to start at $45,900. That really puts it in a complete unique segment. And after this event, we brought these vehicles to Munich and put them on display ahead of the automobile show in Munich. Lots of consumers and commercial buzz, including from other OEMs interested in a potential collaboration with Fisker, which could quickly increase our scale and manufacturing for these vehicles, including platform sharing and manufacturing. Our communication with Foxconn is progressing. In fact, I just talked to them this weekend and we expect to finalize these plans very soon. And of course it is to manufacture the pair in the Foxconn facility in Ohio. And this vehicle has 35% less part than a similar sized EV. So it's quite unique. And we will also have a surprise around the LA Auto Show, which is about in a week's time, where we will actually show the production intent version of the pair to journalists. and it will be available to see at our Grow Lounge for about a week during the LA Auto Show. Another exciting development in the quarter was our announcement that Fisker will adopt the North American charging standard on its vehicles starting in 2025. We signed an agreement with Tesla that will provide our customers with access to over 12,000 additional superchargers around the US and Canada. Sustainability. As I mentioned, it's one of our strongest pillars in the company and ESG remains at the core of everything we stand for at Fisker. In the third quarter, we published our annual ESG report that reflects the value-driven culture we have created across our people, processes, products, and how deeply rooted sustainability is in our business. And it's paying off. It is differentiating us from any of our competitors, as I just mentioned earlier. This report is an important tool that we use for ongoing CO2 reductions and to apply for future vehicle programs. This ongoing analysis helps us work toward our goal to create a climate neutral vehicle. We also expanded our ESG reporting frameworks to now include reporting through the Carbon Disclosure Project, CDP. I'm also proud to announce that we just kicked off our carbon neutral car that will be based on the pair and it will arrive in 2027, way earlier than what anybody else have announced. And next week, Fisker is hosting a sustainability roundtable for journalists on November 18th to elaborate on our ESG initiatives, discuss how we accomplish the lowest possible carbon footprint of any electric SUV, and to encourage deeper engagement on these important topics as we are showing the production version of the pair and the Alaska electric pickup in about a week's time. My optimism about the future of our products is extremely strong. We have a unique place in the automotive market. We have strong demand, and I expect us to keep growing with a potential strategic partner in the works where we can go even faster. But first, we need to increase the speed of deliveries, and we're in the middle of doing just that. I appreciate all of you that are joining us on the journey toward a clean future for all. Before I turn the call over to our new Chief Technology Officer, David King, I'd like to say a few words of introduction about him. I have known David for many years, going back to our time together at Aston Martin. He's a world-class leader, a tremendous engineer, who as Fisker's SVP and leader of Fisker Magic Works, our special vehicle division, have played a vital role in the company's growth. He excels at uniting teams and empowering creativity. I'm confident that he will provide the expertise and enthusiasm for innovation that we need to take Fisker to the next level as we accelerate ocean production and deliveries and prepare to launch PAIR, our EV pickup truck, and Ronin. And with that, I'm now pleased to turn the call over to David.