Fisker’s Surprise Dealership Decision. EV Makers Are Morphing Into Something Familiar.

“As we saw throughout 2023, the EV market has changed dramatically,” said CEO Henrik Fisker in a news release. “We are evolving our business model and intend to add as many as 50 dealer partners in the U.S. and Canada, and a similar number of dealer locations in Europe this year. In keeping with our asset-light strategy, I expect the Dealer Partnership model should enable Fisker to expand its sales and delivery network at a faster pace.”

“Asset-light” refers to the fact that Fisker doesn’t manufacture its cars. It has contracted with

Magna International

which builds the Fisker Ocean SUV in its Austria plant.

But both Fisker and traditional auto makers sell through dealerships they don’t own. That saves auto makers some money, as the dealerships are the ones responsible for building facilities and hiring mechanics.

Tesla sells directly to customers, and owns its dealer and service network. Instead of building cars only for existing orders, Tesla finished the year with inventory levels of roughly 20 days of sales to accommodate its dealer locations. Tesla also uses incentives such as free charging and price discounts to move vehicles off its lots. Dealers of conventional cars also offer incentives, but more along the lines of rebates, and free scheduled maintenance for a few years.

Tesla’s inventory levels look modest compared with the rest of the industry. At the end of the third quarter, overall U.S. new-car inventories amounted to about 70 days of sales. EV inventories were north of 110 days. EV sales in the U.S. grew roughly 45% in 2023 from 2022, but traditional auto makers overproduced the vehicles because they expected even more growth.

That has caused

General Motors

and

Ford Motor

to pause some EV-related spending and take some plant downtime. Matching wholesale volumes with retail volumes is also a very normal practice in the car business.

Investors don’t seem to know what to make of Fisker’s decision. The stock was down about 0.7% in premarket trading, but the market is lower.

S&P 500

futures were down a little, and

Nasdaq Composite

futures were off 0.3%.

Faster growth is good, spending less money to build the business is also good, but dealers make money. Fisker is sacrificing a little margin on the sale of each vehicle.

The number of dealerships that have signed up so far isn’t known. Neither is the structure of the dealership agreements. Fisker didn’t immediately respond to a request for comment.

The decision might not mean all that much for Fisker’s value in the long run. It might just mean that the EV business is morphing into something closer to the traditional auto business as it matures.

Write to Al Root at allen.root@dowjones.com