Fisker will not raise Ocean SUV prices despite higher raw material costs

Fisker has said it will not raise the prices of its Ocean full-electric model, despite hikes in the cost of raw materials.

Instead, the automaker will rely on creating revenue streams by offering over-the-air upgrades to its customers after they purchase the SUV.

CEO Henrik Fisker made the pledge on sticker prices last week following the outcry over the price-hike and subsequent partial climbdown announced by fellow U.S. EV start-up Rivian.

Rivian said it was raising the prices of the R1T pickup and R1S SUV by 17 percent to 20 percent in the U.S. to absorb the rising cost of raw materials and parts, before agreeing to roll back prices for those who have already reserved cars.

The cost of raw materials and parts prices such as computer chips have been rising steadily since demand returned following the COVID-19 pandemic.

Russia's invasion of Ukraine and the subsequent sanctions imposed on Russia have caused prices to further spike.

Fisker announced the $37,499 US start price for the car back in 2020 and set the European entry price at 41,560 euros ahead of production start in November.

Fisker stood by those prices. "We are a digital mobility company with a vehicle OTA [over the air] lifetime business model. We do NOT need to increase our prices at launch or right after," Henrik Fisker wrote on Twitter on Friday.

Fisker instead is hoping that buyers will pay extra during their ownership to add functionality that has been embedded into the car. For example, all models come with heated seats but in the entry Sport version they have to be turned on via a chargeable over-the-air update.

Buyers of the Sport and Ultra models meanwhile will need to pay to switch on the adaptive cruise control functionality within the suite of active safety equipment.

Henrik Fisker said he decided to over-spec the car to enable over-the-air functionality and generate more income over the lifetime of the vehicle.

He gave the example of the electric adjustable steering wheel: "We were thinking originally the base model would have manual adjustment because it saved us a little bit of money," he told Automotive News Europe at the car's European launch at the Mobile World Congress event held in Barcelona at the beginning of March.

Fisker however decided to order the electric adjustment for all cars, getting a slightly better deal on the larger parts order, and hope it can sell the benefits later. "It allows us make money on the base car later with OTA upgrades, where we do need that electric adjustable steering," he said.

He did not reveal what those updates would be.

The costs of the car were fixed, including the batteries from Chinese supplier CATL. "The battery pricing negotiations already been done," he said.

"Generally, if everybody says they are raising prices by five percent then we will probably follow everybody," Henrik Fisker said. "But that this point in time we are not planning to raise prices."