Nissan, Fisker Advance Talks on Investment,Partnership: Game Changing Alliance

Mar 05, 2024 05:59 AM EST

PHOTO BLUE VEHICLE NISSAN — (Photo : PEXELS/Tomáš Malík )

Nissan is currently in advanced discussions regarding an investment in electric vehicle manufacturer Fisker. This potential deal holds the promise of granting the Japanese automaker access to an electric pickup truck, presenting an exciting opportunity for Nissan. Simultaneously, it could serve as a vital financial lifeline for the struggling startup, Fisker, marking the beginning of a potentially beneficial partnership for both entities.

Nissan, Fisker Joint Venture

According to Reuters, the terms under consideration involve Nissan making an investment exceeding $400 million in Fisker's truck platform and commencing the production of Fisker's planned Alaska pickup from 2026 onwards at one of its U.S. assembly plants.

On Thursday, Fisker revealed plans to cut 15% of the company's workforce and expressed doubts about its capacity to continue as a going concern, which was a significant disclosure about the company's future.

The corporation also stated that it was in constant communication with a combined development and investment initiative, but it did not identify the automaker in question. A Fisker spokesman refrained from commenting on speculations, and Nissan personnel were unavailable at the time of publication.

Henrik Fisker previously disclosed to Reuters that negotiations to establish partnership with five automakers are ongoing with the aim of securing increased production capacity for Fisker's automobiles.

Additionally, CarScoops stressed important a partnership with Fisker is to Nissan's long-term goals, particularly in view of Fisker's bold goal of manufacturing 20,000 electric SUVs this year.

Beneficial for Both

CNN Business said that the company revealed it will require more funding from investors to sustain operations for the upcoming year. Notably, Fisker's shares were selling at 75 cents apiece at the close of business on Thursday, but that morning they were little over 40 cents. The discovery showed "substantial doubt about Fisker's ability to continue as a going concern."

Before the Reuters report, Fisker's shares experienced a significant decline of approximately 45%, although they managed to recover some of those losses and were trading down by about 25%, with a market capitalization exceeding $295 million.

One source claims that the deal is presently going through extensive due diligence and that the term sheet has been drafted.

Nissan has encountered difficulties from more nimble competitors. Nissan might be positioned to join the growing electric truck industry in the United States through a possible agreement with Fisker.

On another note, Nissan's discussions with Fisker coincide with its recent "rebalanced" relationship with long-time alliance partner Renault. Following months of negotiations, Nissan and Renault finalized terms of a restructured alliance last year, aiming to establish cross-shareholdings of 15% as part of the agreement.

This revised alliance eliminates certain constraints and has provided Nissan with the autonomy to forge growth strategies in areas such as EVs and software independently from Renault, as indicated by a knowledgeable source familiar with Nissan's strategic direction.

For Fisker, such a deal could potentially serve as a crucial support at a time when aggressive global price reductions by EV leaders like Tesla and BYD are placing pressure on the industry, particularly for startups such as Fisker.

CarScoops also stated it was recently disclosed by Fisker that the company had whittled down a roster of potential partners to a single entity and conveyed its intention to refrain from investing in additional projects until a partnership had been solidified. The prospective deal could potentially elucidate both statements and prove beneficial for both brands concurrently.