Los Angeles, California – Canadian Tier 1 automotive supplier Magna will begin building the Fisker Ocean electric vehicle (EV) in late 2022 in return for a 6% stake in the California company.
Magna President Swamy Kotagiri said, “This is a great example of our strategy to leverage our strong portfolio to scale for future mobility needs and utilize our full vehicle engineering and manufacturing capabilities. This is a unique competitive position for us, particularly with new mobility players and OEMs seeking to expand their electrified offerings.”
Magna has a long history of contract manufacturing finished vehicles for several automakers from its Graz, Austria, Magna Steyr plant. Examples include Jaguar’s I-Pace SUV and E-Pace EV, BMW’s 5-series sedan and Z4 sports coupe, Mercedes G-wagon, and Toyota’s GR Supra.
The Fisker Ocean will initially be manufactured exclusively by Magna in Europe. The vehicle will leverage Magna’s EV architecture combined with the Fisker-Flexible Platform Adaptive Design (FF-PAD) to create a lightweight, aluminum intensive platform for the Fisker Ocean.
“Magna has a unique position in the industry with its market-leading innovative solutions combined with vehicle assembly capabilities that have produced more than 3.7 million vehicles from 30 different models,” said Frank Klein, president Magna Steyr. “Magna’s proven capabilities, particularly in electric vehicles, form a strong basis to support Fisker with world class engineering and manufacturing of the Fisker Ocean.”
The 6% stake in Fisker will be worth about $175 million based on the projected value of the company as it goes through a reverse merger with Spartan Energy Acquisition Corp., an affiliate of Apollo Global Management Inc. Apollo set up Spartan as a special purpose acquisition company (SPAC), a blank check company that goes public looking for promising startups to buy. SPACs have become the financial vehicle of choice for EV companies with Lordstown Motors and Nikola also using the technique.
The $175 million price tag is a tiny fraction of the cost of establishing a new factory. For Magna, if Fisker succeeds with its low-cost EV crossover, the returns on growing Fisker shares could be huge.
Fisker Chairman and CEO Henrik Fisker said his company chose Magna’s EV architecture because it offered the clearest path to meeting the Ocean’s aggressive price target of less than $40,000, about half of what Tesla charges for the Model X against which the Ocean will compete.
“Combined with our own Fisker developed IP, the new FM29 platform is projected to deliver class-leading range, interior space with third-row seating and overall vehicle performance. These factors, combined with capital investments, bill of materials, and manufacturing costs, will enable us to deliver the Ocean to market at a starting MSRP of $37,499,” Fisker said.
The companies plan to have Ocean models available in early 2023.