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

Fisker, the California-based maker of luxury electric vehicles, revealed price changes Monday to its lineup of the all-electric Ocean SUV in an effort to draw more demand to its more expensive trim before raising costs next year of its more affordable options.

Fisker Chairman and CEO Henrik Fisker said the price adjustments are to combat competition and because it’s “essential that Fisker responds to competitive realities in the rapidly growing EV market.”

“We want our customers to have greater access to the Ocean and to be able to take advantage of its exciting combination of innovative features, striking design, sustainable materials and class-leading range,” Mr. Fisker said in a statement.

The Fisker Ocean Extreme, the most expensive trim level of the Ocean series that is designed to rival the Range Rover Evoque, will drop $7,500 from $68,999 to $61,499. The change is effective immediately, which means customers who have already ordered or purchased the model will receive the reduction.

But when Fisker unveils its 2024 models on Nov. 6, other Fisker Ocean trims are set to go up. The Ocean Ultra will increase $3,000 from $49,999 to $52,999, and the Ocean Sport will tick up $1,500 from $37,499 to $38,999.

“We are very confident in the continued demand for the Ocean, and we expect the Sport and Ultra models to be the highest sellers starting in 2024,” Mr. Fisker said. “We expect our overall margins will be unaffected because higher Sport and Ultra pricing, combined with our cost-reduction initiatives and lower input prices, will support the anticipated trajectory of our profits.”

Across the EV industry, prices are down nearly 20% this year as competitors look to take on Tesla’s cheaper sticker prices and convert more owners of gas-powered vehicles amid lower-than-expected consumer demand. The average sales price for an EV was $53,469 in July, down from more than $61,000 in January, according to Kelley Blue Book.

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

While demand for EV sales continues to grow, it remains at a far slower pace than manufacturers expected and threatens the Biden administration’s ambitious hopes of forcing automakers to sell up to 60% EVs by 2030 and 67% by 2032 with stringent tailpipe emissions rules.

EVs accounted for 9.1% of all new light-duty vehicle sales made in the second quarter of this year, or just under 355,000 EVs, according to an analysis released last month by auto industry lobbying group Alliance for Automotive Innovation. That’s up from 8.6% in Q1 and is up from 6.6% in Q2 of 2022.

But at the current growth pace over the past few years, it would take the industry more than two decades to achieve the 60% threshold President Biden wants to reach in less than seven years.

EV buyers can receive up to $7,500 in tax credits per vehicle from Democrats’ tax-and-climate spending law known as the Inflation Reduction Act.

In addition to higher EV sticker prices deterring Americans — the average new car buyer paid $48,334 in July compared to the $53,469 average for EVs per Kelley Blue Book — the lack of abundant and accessible public charging stations continues to hamper growth.

There are only about 140,000 public charging outlets for 3.7 million EVs — a ratio of 26 EVs per charger, according to Alliance for Automotive Innovation. The California Energy Commission says a ratio of one public charging port per seven EVs will be required if Americans want to completely ditch gas-guzzlers.

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