No One Could Save Fisker, EV Startup Files For Bankruptcy
Electric vehicle startup Fisker has filed for Chapter 11 bankruptcy, seeking to sell its assets and restructure its debt after months of financial turmoil and disappointing sales.
Electric vehicle startup Fisker has filed for Chapter 11 bankruptcy, seeking to sell its assets and restructure its debt after months of financial turmoil and disappointing sales.
Electric vehicle startup Fisker has filed for Chapter 11 bankruptcy, seeking to restructure its debts by selling its assets, valued between $500 million and $1 billion, to cover liabilities of up to $500 million. This move follows months of financial instability and operational challenges that have left the company struggling to stay afloat.
Fisker’s troubles became apparent when it failed to meet its production targets for 2023, producing only 10,000 units of its Ocean SUV instead of the planned 40,000. Despite slashing prices drastically, with entry-level models reduced to $24,999, the company couldn’t generate sufficient cash flow. Production halted in March, and by mid-year, Fisker was forced to seek bankruptcy protection.
In an effort to stave off bankruptcy, Fisker engaged in negotiations with several automakers, including Nissan. However, these talks failed to result in a rescue deal. As Fisker burned through its cash reserves, it hired restructuring advisors in March, culminating in the June 17 bankruptcy filing. The company is now in advanced talks for debtor-in-possession financing to sustain operations during the restructuring process.
Mixed Reviews For the Ocean
The Ocean SUV, Fisker’s flagship model, received mixed reviews and faced numerous technical issues, including defective brakes and problematic doors. Consumer Reports noted the vehicle’s failure to live up to its initial promise. Additionally, the Ocean was excluded from tax credits unless leased, further hampering its marketability. Despite an improved 2.0 software update, the vehicle’s problems persisted, deterring potential buyers.
The bankruptcy has left existing Fisker owners in a difficult position, with no service, spare parts, warranty, or roadside assistance available. The company’s drastic price cuts, even offering vehicles to employees for as low as $20,000, reflect its desperate attempt to clear inventory. However, these discounts have not been enough to attract buyers, given the uncertainties surrounding the company's future.
Henrik Fisker, the Danish automotive designer behind the company, now faces the collapse of his second automotive venture. His previous company, Fisker Automotive, also went bankrupt in 2013. Despite his innovative designs, Henrik Fisker’s ventures have struggled to achieve commercial success. Whether he can recover from this latest setback and attract investors for future projects remains to be seen.
