Fisker, the California-based maker of luxury electric vehicles, has announced a price reduction for its all-electric Ocean SUV in an effort to boost demand for its higher-priced trim. The company also warned that prices for its more affordable options will increase in 2024.
The price adjustments come as Fisker faces competition in the rapidly growing EV market and seeks to respond to market realities. The goal is to make the Ocean SUV more accessible to customers by offering a combination of innovative features, striking design, sustainable materials, and class-leading range.
The most expensive trim level of the Ocean series, the Fisker Ocean Extreme, will drop in price by $7,500, from $68,999 to $61,499. This price reduction is effective immediately for customers who have already ordered or purchased the model.
However, Fisker plans to increase prices for other Ocean trims in 2024. The Ocean Ultra will see a $3,000 increase, from $49,999 to $52,999, while the Ocean Sport will go up by $1,500, from $37,499 to $38,999.
Fisker’s CEO, Henrik Fisker, expressed confidence in the continued demand for the Ocean SUV. He expects the Sport and Ultra models to be the highest sellers in 2024. Fisker believes that overall margins will remain unaffected, as higher pricing for the Sport and Ultra, combined with cost-reduction initiatives and lower input prices, will support the company’s anticipated profits.
While Fisker and other EV manufacturers are facing competition from Tesla’s cheaper sticker prices, industry-wide prices have been decreasing by nearly 20% this year. This trend is driven by the desire to attract more owners of gas-powered vehicles and stimulate demand in a market that has been slower to adopt EVs than expected.
Despite the growing demand for EVs, it remains slower than anticipated, which poses challenges for the Biden administration’s goal of increasing EV sales. The administration aims to have automakers sell up to 60% EVs by 2030 and 67% by 2032. These ambitious targets are tied to stringent tailpipe emissions rules.
In the second quarter of this year, EVs accounted for 9.1% of all new light-duty vehicle sales, representing just under 355,000 EVs. This is an increase from 8.6% in the first quarter and 6.6% in the second quarter of 2022. However, if the current growth pace continues, it would take over two decades to reach the 60% threshold set by President Biden.
Buyers of EVs can benefit from up to $7,500 in tax credits per vehicle under the Inflation Reduction Act, which is part of Democrats’ tax-and-climate spending law.
In addition to price considerations, the lack of abundant and accessible public charging stations remains a hindrance to EV adoption. With only about 140,000 public charging outlets for 3.7 million EVs, there is an average ratio of 26 EVs per charger. To fully transition from gas-powered vehicles, experts say a ratio of one public charging port per seven EVs will be required.
In summary, Fisker is adjusting the price of its Ocean SUV to attract more demand for its higher-priced trim. However, customers should be aware that prices for other Ocean trims will increase in 2024. The EV market is becoming more competitive, with prices decreasing industry-wide. The pace of EV adoption is slower than expected, posing challenges to the Biden administration’s EV sales targets. Public charging infrastructure remains a limitation to widespread EV adoption.
Unique Perspective: It is crucial for automakers to respond to competitive realities in the EV market by adjusting prices and making their vehicles more accessible. Lower prices can help attract a wider customer base and stimulate demand. However, to achieve the ambitious goals set by the Biden administration, the industry needs to address challenges such as charging infrastructure and continue to innovate to meet consumer preferences.
