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⚡🧑⚖️ Did American Lease Just Buy Fisker?
American Lease, one of the largest NYC TLC rental companies, reaches deal to acquire thousands of all-electric SUVs from bankrupt Fisker, along with company software "source code". What's going on?
American Lease is one of the largest NYC TLC rental companies with ~5,000 for-hire vehicle (FHV) licenses (a/k/a TLC Plates)
“Green Rides” requirement that 100% of all NYC FHVs used for high-volume trips (Uber and Lyft) be either wheelchair accessible (WAV) or electric (EV) by 2030 is forcing rental companies to make huge investments to transition fleets
Fisker, an EV startup that recently filed for bankruptcy, agreed to sell over 3,000 of its luxury Ocean SUVs to American Lease
Up to $46 million transaction, or an average of ~$14,000 per Fisker Ocean, was approved by Delaware bankruptcy court *today*
Fisker produced a total of ~10,000 Oceans before going bankrupt, American Lease is also set to gain access to Fisker’s software “source code”
DISCLAIMER: AutoMarketplace is working to confirm whether final transaction terms were different from originally proposed deal. This is a breaking story.
“American Lease wants to be the leader in electrification and wants to bring affordable EVs to the NYC FHV market.”
- American Lease statement to AutoMarketplace
American Lease, one of the largest NYC for-hire transportation (TLC) rental companies, is usually a name only people involved in the TLC industry know of.
Recently, that’s changed.
The NYC rideshare-focused leasing company is being mentioned in national business news outlets like the Wall Street Journal and TechCrunch, and major automotive publications like Car and Driver and MotorTrend. It was all related to American Lease’s plans to buy over 3,000 (👀) all-electric SUVs from bankrupt EV startup Fisker.
Today, American Lease’s proposed transaction was approved ✅ in Delaware bankruptcy court.
Over the past several days, the AutoMarketplace team spoke with American Lease executives to understand the reasoning behind making the offer for Fisker’s unsold EV fleet. Undoubtedly, a brave, “bet the company” business decision. The TLC leasing company also allowed the AutoMarketplace team to test drive a Fisker Ocean SUV.
Below, we share a quick video overview of this article and brief review of the Fisker Ocean. From our research, it appears ~10,000 Fisker Ocean SUVs were produced before the company filed for bankruptcy. Therefore, the sale of over 3,000 Oceans and access to software source code (we’ll explain this below and in the video) would be a big deal for several reasons. Specifically, other Fisker Ocean owners, across North America, will be closely tracking what a transaction could mean for them and whether they can effectively maintain and repair their vehicles, including recall work.
Green Rides Mandate
When we spoke to American Lease, they stated the following:
“American Lease wants to be the leader in electrification and wants to bring affordable EVs to the NYC FHV market.”
- American Lease statement to AutoMarketplace
Remember, NYC’s recently passed Green Rides Initiative requires 100% of all for-hire “high-volume” base trips (only Uber and Lyft at the moment), to be completed in either a wheelchair accessible (WAV) or zero-emission vehicle (EV).
Since most of American Lease’s rental customer base works with Uber and Lyft in NYC, they have a huge task in front of them. How does American Lease make their fleet of ~5,000 vehicles (👀) compliant with the Green Rides mandate?
Although 2030 seems like a long way off, NYC drivers and fleets have to be thinking about the transition right now. For example, if the average auto loan is 5 to 6 years or leasing company math is based on a vehicle having a 3 to 5 year useful life, the all-EV or WAV transition mostly has to happen by 2027…only 3 years from now!
American Lease confirmed to us that the primary motivation behind the Fisker transaction relates to its strategy around Green Rides compliance.
Why Is American Lease Buying Fisker Oceans?
First, some very brief background on Fisker.
Fisker Inc. was automotive designer and entrepreneur Henrik Fisker’s second attempt at creating a startup EV company. His first attempt Fisker Automotive, a different company, filed for bankruptcy in 2013.
Although Fisker Inc. managed to successfully list on the stock market in 2020, via a deal supported by well known investment firm Apollo, the company struggled to scale and ultimately ran out of money. Obviously, there’s a lot more to the story but that isn’t the focus of this article.
“This is the Worst Car I’ve Ever Reviewed”
The Fisker Ocean is probably best known for the brutal review YouTube influencer Marques Brownlee gave it earlier this year, in a video titled “This is the Worst Car I’ve Ever Reviewed”. This was a big deal, as Brownlee is widely followed and has millions of subscribers across his social media channels. It was so bad, he even did a second review, after the company requested it, of the Ocean with Fisker’s latest “2.0” software update. Finally, he did a follow-up video explaining and sticking with his original harsh review of the Fisker Ocean (“The Fisker was a terrible car…it is a terrible car”).
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Is the Fisker Ocean Really That Bad?
If you actually watch Brownlee’s initial review it’s not as bad as the video’s title makes it sound. He even says the build of the Ocean is nice, with good exterior styling, a solid interior and over 350 miles of range. The main issues revolved around quirks in the vehicle (airport-style trays, no glove box), bad key fob, glitchy software and a somewhat awkward drive, especially related to “idle creep”.
We think Brownlee’s main point was no one should be spending $40,000 to $60,000+ buying the Ocean, the vehicle’s original MSRP range. In our opinion, that’s kindof a fair point and leads us back to American Lease’s Fisker transaction.
After driving a Fisker Ocean American Lease lent us, we definitely don’t think it’s the worst car ever, but rather a quirky, premium vehicle that (1) was initially priced too high and (2) needed to go through a few more design and technical iterations.
After Brownlee’s review we think another video by well known YouTube influencer, Rich Rebuilds, is worth watching. Note, the video was made before Fisker’s bankruptcy.
“I feel bad for people who paid $68,000 for [the Fisker Ocean], for $25,000 I’d raise my eyebrows…if it was for sale for $20,000 I’m all-in…and if they ever get to $15,000, I’d buy two of them. I think the [Ocean] is quirky, a little weird, but I think it’s unique…because I have the bandwidth to keep it going…when we do repair them we can share that knowledge [with] other Fisker owners as well.”
- Rich Rebuilds
Rich kindof hits the nail on the head in our opinion and probably describes American Lease’s thinking. For a cheap enough price, the Ocean could provide a cost effective way for American Lease to transition its NYC rideshare fleet to EVs and also allow for other potential financial upside (i.e., sell parts, provide software updates to other Fisker Ocean owners).
Btw Rich actually did end up buying an Ocean for $10,000 a few days ago!
American Lease executives also told us that the Oceans they would acquire have 360 miles of range, will have recalls completed, the latest “2.1” software update and are all-wheel drive (AWD). According to the NYC for-hire vehicle rental company, the battery pack and chassis of the Ocean are not proprietary and can still be directly sourced. Note, the Ocean was assembled by automotive contract manufacturer Magna Steyr, which also makes vehicles for Mercedes, BMW, Toyota, and Jaguar. In other words, perhaps American Lease might be able to source parts from Magna still (just a guess).
Ultimately, American Lease tells us it’s hoping to offer premium EVs at competitive rental rates. The Fisker transaction definitely comes with risks, but the pitch is believable and compelling. They’ve bought the vehicles at a very good price that should mitigate many risks. Customers, time and NYC streets will be the ultimately judge though.
Transaction Details? Why Is Fisker Selling Its Unsold Fleet To American Lease?
Given American Lease’s deal was just officially approved, for this piece we’re assuming the final deal is relatively inline with what was outlined in a bankruptcy document a few weeks ago.
The following headlines, we believe, are noteworthy if the deal is completed, as was originally proposed.
American Lease would be buying a fleet of over 3,000 Ocean SUVs at an average of ~$14,000 per vehicle. As Rich Rebuilds said “if they ever get to $15,000, I’d buy two of them”.
American Lease may “own or otherwise acquire hereunder or otherwise) all relevant source code or other proprietary software operating elements, as well as existing developer work”.
In terms of why Fisker is selling its fleet, the answer is pretty simple - they need money to make payroll for remaining employees, fund their bankruptcy and pay secured creditors who are likely looking to be paid sooner rather than later.
Given the value of the company’s unsold Ocean SUV fleet could significantly depreciate in the coming months, Fisker’s largest secured creditor Heights Capital Management, an affiliate of Susquehanna International Group (SIG), likely wanted to complete a bulk fleet deal to maximize their recovery (% of money owed to them by Fisker).
While American Lease didn’t actually buy the company Fisker Inc., it will own ~30% of all vehicles the company ever produced after its transaction is complete, have unique access to Fisker software and can engage a previous contract manufacturer. We don’t want to get too ahead of ourselves, but the facts and circumstances are intriguing. If American Lease becomes an expert at running and maintaining Fisker Oceans, maybe something interesting happens? For now though, what we’re trying to imply is pure speculation.
Finally, we wanted to thank the American Lease team for allowing us to test drive a Fisker Ocean. We will do a follow-up story and longer review on the Ocean as we gather more details and as thousands of Fiskers ultimately hit NYC streets! If you’re a TLC-licensed driver and are interested in leasing a Fisker Ocean (when they become available), email us at info@automarketplace.com.
American Lease is definitely one step ahead with this deal, it's definitely going to take them a little while to put them all in the streets, EVs are still not the preferred vehicle (subject to change as the 50% benchmark on the Green Rides Initiative approaches), supercharging infrastructure it's still pretty poor in NYC especially during rush hours and word out there is that the saving comparing a gas vehicle go from bare minimum to none. Putting all that aside definitely a great deal, purchase price was a steal which will allow them to offer good prices, be able to maintain them and make a profit, these have been the challenges rental companies have faced with EVs, look at Hertz with their Teslas and on the TLC side Sally with a bunch of Kia Niros sitting on their garage.