Fisker Cuts Price of SUV in Attempt to Increase Demand, Warns of 2024 Price Hikes

Fisker, the California-based maker of luxury electric vehicles, has announced price changes to its lineup of the all-electric Ocean SUV. The company aims to increase demand for its more expensive trim before raising prices in 2024 for its more affordable options.

Fisker Chairman and CEO Henrik Fisker stated that the price adjustments were made to stay competitive in the rapidly growing EV market. He emphasized that it’s important for Fisker to respond to market realities in order to give customers greater access to the Ocean and its innovative features.

The most expensive trim level of the Ocean series, the Fisker Ocean Extreme, will see a price drop of $7,500 from $68,999 to $61,499. This change is effective immediately and will apply to customers who have already ordered or purchased the model.

However, Fisker plans to increase prices for other Ocean trims when it unveils its 2024 models. The Ocean Ultra will go up by $3,000 from $49,999 to $52,999, and the Ocean Sport will increase by $1,500 from $37,499 to $38,999.

Fisker remains confident in the demand for the Ocean and expects the Sport and Ultra models to be the highest sellers in 2024. The company believes that higher pricing for these models, combined with cost-reduction initiatives and lower input prices, will support the trajectory of their profits.

In an effort to compete with Tesla’s lower prices and increase adoption among gas-powered vehicle owners, prices for electric vehicles across the industry have gone down by nearly 20% this year. The average sales price for an EV was $53,469 in July, compared to over $61,000 in January.

Tesla has also reduced its prices, with entry-level costs for the Model 3 at $38,990 and the Model Y at $45,990.

While the demand for EVs continues to grow, it is happening at a slower pace than manufacturers expected. This poses a challenge to the Biden administration’s goal of achieving high EV sales percentages with strict emissions rules.

According to an analysis by the Alliance for Automotive Innovation, EVs accounted for 9.1% of all new light-duty vehicle sales in Q2 2023. This is an increase from 8.6% in Q1 2023 and 6.6% in Q2 2022. However, at the current growth rate, it would take the industry more than two decades to reach the 60% threshold President Biden aims to achieve in less than seven years.

Buyers of EVs can receive up to $7,500 in tax credits per vehicle through the Inflation Reduction Act.

Additionally, the lack of accessible public charging stations continues to hinder the growth of the EV market. Currently, there are approximately 140,000 public charging outlets for 3.7 million EVs, resulting in a ratio of 26 EVs per charger. To fully transition away from gas-powered vehicles, the California Energy Commission recommends a ratio of one public charging port per seven EVs.