The pre-production electric vehicle maker Fisker Inc (NYSE:FSR) said on Thursday it now expects 2021 operating expenses to be in the range of $295 million to $320 million, compared with its earlier forecast of between $240 million to $270 million.

What Happened: The Los Angeles, California-based Fisker cited R&D spending and validation tests in areas with more advanced technology as the reason behind the increase in spending as it nears production of its electric sports utility vehicle Ocean in November. 

The company however lowered the capex guidance to be in the range of $195 million to $210 million compared with its prior estimate of $210 million to $240 million and said it ended the second quarter with $962 million in cash. 

The electric vehicle maker said reservations for Ocean are now approaching 17,500 units, up from 16,000 vehicles as of May. Fisker added it expects bookings to accelerate in November when it launches the vehicle and begins production. 

Fisker is aiming for 25,000 reservations by the end of the year. 

The company's Co-Founder and Chief Financial Officer Dr. Geeta Gupta-Fisker told investors in a post-earnings call on Thursday that the company made a strategic decision to develop internal capabilities to test and validate, instead of relying solely on third parties which will help cut costs and also be beneficial in future programs.

On Partnerships: The company said that its partnership with Hon Hai Precision Industry Co (OTC:HNHAF), also known as Foxconn and a key Apple Inc (NASDAQ:AAPL) supplier, is accelerating faster than expected.

“We actually do not intend to take any equity investment from Foxconn. We believe that our partner's interest should be 100% aligned with our financially...we are joint owners in the program and as a result have equal skin in the game,” Gupta-Fisker told investors.

Fisker and Foxconn signed a joint venture called Project PEAR (personal electric automotive revolution) that will bring an electric vehicle to market for under $30,000 to markets including North America, Europe, China and India.

However, its first electric vehicle, the Fisker Ocean SUV, will be assembled by automotive contract manufacturer Magna International (NYSE:MG) in Europe. The company reiterated plans to begin production in November 2022 along with the marketing campaign to push sales. 

When launched, the EV maker’s products will compete with Tesla Inc (NASDAQ:TSLA), a company that once employed Henrik Fisker and even sued him over design secrets.

Price Action: FSR shares closed 5.15% higher at $15.53 on Thursday but were down 0.52% in after hours trading. 

See Also: Fisker, Which Won't Begin Production Until Late 2022, Says It's Not Hit By Chip Shortage

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Photo: Courtesy of Fisker