In its recent Q4 earnings report, electric vehicle (EV) manufacturer Fisker (FSR) revealed a series of setbacks that have rattled investors and analysts on Wall Street. The company expressed doubts about its ability to continue as a going concern when it files its official financial statements for 2023, citing its financial condition, evolving dealership sales approach, and the challenging EV market as contributing factors.

As a result, Fisker announced a reduction in its workforce by 15%, highlighting the extent of the difficulties it is currently facing. The company ended Q4 with approximately $396 million in cash, although $70 million of that amount is restricted.

Despite these challenges, Fisker stated that it is in discussions with a current noteholder regarding an additional investment and is also negotiating with a large automaker for a potential strategic transaction. This partnership could involve an investment in Fisker, joint development of electric vehicle platforms, and North American manufacturing.

While news of a potential cash infusion and a collaboration with an established automaker seemed encouraging, it was not enough to dispel concerns surrounding Fisker's tenuous financial situation. Share prices for the EV maker plummeted over 40% in early trade and have remained below $1 since early January.

Itay Michaeli, a Citi analyst, acknowledged that Fisker's lone product, the Ocean EV, holds promise and is attractive to potential investors. However, Michaeli expressed skepticism and downgraded the stock to Neutral/High Risk. He also revised the price target downward to $0.80 from $4, citing the need for more substantial progress in securing a strategic partnership.

In Q4, Fisker reported revenue of $200.1 million, which fell short of Bloomberg consensus estimates of $272.9 million. The company also disclosed a net loss of $463.6 million, significantly wider than the anticipated loss of $82.7 million.

Chairman and CEO Henrik Fisker acknowledged the challenges faced in 2023, including supplier delays, workforce shortages, and difficulties in finding suitable locations for their direct-to-consumer (DTC) model. Consequently, Fisker expanded its scope to include traditional dealer partnerships, with 12 dealers already onboard and more than 250 expressing interest.

Notwithstanding these efforts, the main concern for investors remains Fisker's limited cash reserves. Michaeli emphasized that the narrowing liquidity runway and unresolved accounting/reporting issues make it difficult to justify an investment in Fisker with poor short-term visibility.

Fisker's chairman and CEO, Henrik Fisker, will discuss the company's current situation in a live interview on Yahoo Finance today at 4 p.m. ET. This event is expected to provide further insights into Fisker's plans for the future amid its ongoing challenges.