By Samrhitha A and Abhirup Roy
(Reuters) - Electric-vehicle startup Fisker slashed its 2023 production guidance on Monday as it struggles to ramp up deliveries and flagged weakness in internal controls over financial reporting, sending its shares down 14% after the bell.
Fisker now expects production of 13,000 to 17,000 electric vehicles in 2023, down from its prior projection of 20,000 to 23,000 vehicles to make sure the company does not sit on too much inventory and to better manage working capital.
"This may be short-term pain and it may not be something that Wall Street wants to hear but it is extremely responsible for us, and it is essential for us that we do this for the long term," Chief Financial Officer Geeta Fisker said on a post-earnings conference call.
Fisker had already cut its production forecast in August, blaming a key supplier that needed more time to lift capacity, and on Monday said that though supply chain had stabilized it still expects "the occasional bottleneck" from a few suppliers going ahead.
Fisker's latest cut comes amid fears of a slowdown in EV demand, with market leader Tesla CEO Elon Musk warning that high interest rates, meant to cool stubborn inflation, are souring consumer sentiment and cautious commentary from Ford and General Motors.
Last week Luxury EV maker Lucid also slashed its production forecast to align with the lower number of deliveries.
Fisker cut prices of its high-end Ocean Extreme SUV last month, joining peers in a profit-sapping price war sparked by Tesla to stoke demand.
But Fisker said it was limited by its delivery and service infrastructure rather than production and demand, tough it acknowledged the impact of high interest rates on consumer spending.
"We have not been able to follow through with deliveries fast enough," CEO Henrik Fisker said on the call.
"People have paid and are waiting for their cars, and some of them are really getting annoyed," he said, adding that Fisker was hiring 20-30 people a week, getting more logistics partners and opening new facilities in an effort to ramp up deliveries.
Fisker said it delivered 1,200 vehicles in October, more than the 1,097 it delivered in the third quarter, and was on track to deliver even more cars this month.
Revenue for the third quarter was, however, lower than analysts' expectations at $71.8 million with a larger-than-expected loss of $91 million.
Fisker had delayed its results from Nov. 8, citing the departure of its former chief accounting officer and on Monday said it had "determined that it has material weaknesses in the company's internal control over financial reporting."
The issues were related to complex accounting in multiple countries, involving convertible notes, derivatives as well as raw material and finished goods inventory in the contract manufacturing of its vehicles, Fisker said, adding that it was hiring experts to better address the issues.
(Reporting by Samrhitha Arunasalam, Jaiveer Singh Shekhawat and Akash Sriram in Bengaluru and Abhirup Roy in San Francisco; Editing by Shounak Dasgupta and Stephen Coates)