Fisker Announces Plans for Local Production in China's Competitive EV Market
Fisker is preparing to enter the highly competitive electric vehicle (EV) market in China, following the lead of another ambitious American player, Lucid. Founded by Danish auto designer Henrik Fisker, the company plans to establish a delivery center in China this year and start delivering its first all-electric model, the Fisker Ocean SUV, in Q1 2024. Moreover, Fisker aims to commence local manufacturing in China as early as next year, with the potential to increase its production capacity by 75,000 Ocean SUVs.
Fisker intends to address the high demand it has received from Europe and the U.S. by establishing a production facility in China. This strategic move enables the company to boost its production target to 42,400 units by the conclusion of 2023.
Similar to Tesla’s successful partnership with the Shanghai government, Fisker has already taken steps to establish relationships with Chinese authorities. The company’s leadership team recently visited China, engaging in discussions with officials and business leaders in Shanghai regarding collaborations, supply chains, logistics, warehousing, and future production development.
Fisker operates in the luxury segment of the EV market, which puts it in competition with Nio, China’s premium homegrown EV brand. In a market where Tesla’s aggressive price cuts have sparked a price war, even Nio, which had initially committed to not joining the battle, recently announced a $4,000 price reduction across all its products. However, Nio still trails behind major players like BYD and Tesla. As of April, BYD, a Chinese EV and battery giant, held nearly a quarter of the all-electric auto market, while Tesla claimed the second spot with a 12% market share, according to data from the China Passenger Car Association. In the same period, Nio sold just under 40,000 units, representing a 3.4% share of the all-electric segment.
Fisker is optimistic about its expansion into China, leveraging both the country’s vast market size and its affinity for international luxury vehicles. The company is betting that the affluent class, known for their purchases of Audi, Mercedes-Benz, and BMW vehicles, will seek equivalent alternatives in the electric era. Daniel Foa, Fisker’s China board member, highlighted China’s significance, stating, “China accounts for one-third of global vehicle sales, with around 26 million cars sold in 2022, including 6-7 million electric vehicles, capturing approximately 25% of the market.
In 2023 year-to-date, this share has increased to around 27%. Additionally, the premium and affordable luxury segments are growing faster than the general market, and Fisker aligns perfectly with its unique history, features, and design.”
China has long demonstrated a strong affinity for high-quality international automotive brands, and the country is experiencing a rapid shift towards electrification driven by government policies and changing consumer behavior. Fisker is one of only two international EV-only companies that provide viable alternatives to traditional brands.
Henrik Fisker himself is familiar with the Chinese capital market, as China’s largest auto parts company, Wanxiang Group, acquired the assets of Fisker Automotive, the original auto company founded by Mr. Fisker, in 2014. Wanxiang Group also has a significant investment presence in the web3 industry.
Overall, Fisker’s entry into China’s EV market signifies its determination to capture a share of the rapidly growing segment, leveraging the country’s immense market potential and favorable attitude towards luxury international brands.