In its Q4 earnings report, Fisker Inc. revealed a series of challenges that have raised concerns about the company's sustainability. Fisker, an electric vehicle (EV) manufacturer, expressed "substantial doubt" regarding its ability to continue as a going concern when it files its official financial statements for 2023. The company also announced that it would reduce its headcount by 15%.

With $396 million in cash at the end of Q4, Fisker faces a potential liquidity issue. However, $70 million of that amount is restricted. To address this, Fisker is in discussions with a current note-holder for an additional investment and is also negotiating with a large automaker for a potential transaction that could include an investment, joint development of electric vehicle platforms, and North American manufacturing.

It was reported by Reuters on Friday that Fisker is in preliminary talks with Nissan for a $400 million cash injection, which would provide Nissan access to Fisker's upcoming truck platform. Fisker CEO and chairman, Henrik Fisker, confirmed that talks with an automaker were advanced but did not explicitly confirm or deny whether it was Nissan.

Despite the potential partnership with Nissan and other original equipment manufacturers (OEMs), doubts about Fisker's precarious financial condition persisted. As a result, Fisker's shares plummeted nearly 34% on Friday, remaining below $1 since early January. Falling short of Bloomberg consensus estimates, Fisker reported Q4 revenue of $200.1 million and a net loss of $463.6 million, significantly wider than expected.

Wall Street analysts expressed mixed opinions about Fisker's outlook. Citi analyst Itay Michaeli acknowledged the promise in Fisker's Ocean EV and the interest from established automakers, but cautioned against solely relying on such agreements. Downgrading the stock to Neutral/High Risk and lowering the price target to $0.80 from $4, Michaeli cited the need for further progress and the liquidity concerns surrounding the company.

Fisker's challenges in setting up its direct-to-consumer model prompted a shift towards traditional dealer partnerships. Currently, the company has 12 dealer partners and more than 250 interested dealers. While this transition shows promise, investors remain primarily concerned about Fisker's lack of cash. The NYSE non-compliant share price and the narrowing liquidity runway contribute to the skepticism surrounding the company's short-term visibility.

In response to the confidence in their vehicles and the dealer model, Fisker's CEO remains optimistic about future sales growth despite the EV market slump of recent months. The company experienced a 250% sales growth from Q3 to Q4 and aims to accelerate sales further.

Amidst ongoing negotiations with potential partners and investors, Fisker faces critical challenges to secure its financial stability and market position. The outcome of these discussions will likely shape the future of the company as it strives to overcome liquidity concerns and regain investor confidence.