Fisker closes deal for Magna to build its SUV, take stake in startup

DETROIT -- Fisker Inc., which is going public through a merger with special-purpose acquisition company, said Thursday auto supplier Magna International Inc. will supply the vehicle platform and build the electric carmaker's Ocean SUV.

As part of the deal, Magna will receive warrants to purchase a stake of up to 6 percent in Fisker, worth about $3 billion, Fisker CEO Henrik Fisker told Reuters.

"We're full speed ahead," Fisker said in a telephone interview. "This is a huge turning point. We realized Magna would be an amazing partner because having skin in the game obviously means we both have the same goal of getting this car to market."

Fisker, which is merging with Spartan Energy Acquisition Corp., said it had finalized a deal with Canada's Magna to build the Ocean in Europe, marking the Canadian supplier's first entry into contract manufacturing for an EV startup.

Magna President Swamy Kotagiri told Automotive News Thursday that Fisker “had an appealing design, seemed to have a team with automotive experience, are starting to lay the groundwork in Silicon Valley. They came to us with the right set of questions and criteria and we felt we could bring value to the team overall.

“The differentiator for Magna has been the ability to bring all of these platforms together in the full vehicle engineering integration and manufacturing,” Kotagiri added. “We are able to bring the whole value proposition of not only just supplying systems, but bringing it all together and integrating it into a vehicle.”

Magna also has a tentative deal to build vehicles for EV startup Canoo Holdings Ltd., which is also going public later this year through a reverse merger with a special-purpose acquisition company, or SPAC.

“There are a lot of conversations with existing customers as well as the new entrants and startups,” Kotagiri said. “At this point in time, [there’s] nothing more concrete, but definitely, conversations with them and others.” 

Magna's stake in Fisker is subject to hitting three engineering and production milestones through the planned start of production of the Ocean in November 2022, Henrik Fisker said. The company said in August it had a tentative deal for Magna to build the SUV at its Graz, Austria, plant.

“We are not looking at that as equity or ownership,” Kotagiri said of the stake. “It is the value of the entire package that we bring to the table. It is a business model.” 

Fisker had previously said it was negotiating to use Volkswagen Group's MEB electric-vehicle platform for the Ocean, but Fisker said the company remains in talks with the German automaker to use unspecified body and interior parts.

Fisker and Magna are in talks with major EV battery manufacturers about supplying the necessary batteries, a Fisker spokesman said.

Use of Magna's aluminum-intensive vehicle platform will allow the Ocean to have an electric driving range of more than 300 miles and will allow Fisker to offer buyers the option of a third-row of seating, Fisker said.

The vehicle will have a starting price of $37,499.

Fisker's merger with Spartan is expected to close on Oct. 30 and the EV maker's shares will trade on the New York Stock Exchange under the symbol "FSR", Fisker said.

Alexa St. John of Automotive News contributed to this report.