After talks with a big carmaker broke down late on Monday, Fisker, a U.S.-based manufacturer of electric vehicles, filed for bankruptcy protection. The startup was left exposed because of how quickly it spent money to introduce its Ocean SUV in both the U.S. and Europe.
The division in question, Fisker Group Inc., filed for Chapter 11 protection in Delaware, citing $500 million to $1 billion in projected assets against $100 million to $500 million in liabilities. Additionally, Fisker has between 200 and 999 creditors, according to the documents. Fisker was compelled to consider strategic options when talks with a major automaker broke down in March. These included looking into financing markets and possible in-court or out-of-court restructurings.
Fisker did not name the manufacturer involved, but sources suggested that Nissan was in advanced talks to acquire the business. Henrik Fisker, a well-known automobile designer, founded the business. In February of that year, the company raised doubts about its continued sustainability and stopped investing in new projects until a cooperation agreement was reached.
In addition, Fisker disclosed a 15% reduction in staff as a result of difficulties selling their Ocean EVs. With only over 4,700 deliveries, the company produced over 10,000 automobiles in 2023—less than 25% of its initial goal.
These difficulties were made worse last month when a preliminary inquiry of some Fisker-made 2023 Ocean EVs was opened by the US auto safety regulator. This was in addition to the National Highway Traffic Safety Administration’s (NHTSA) ongoing investigations into three earlier accidents involving these cars.
The company faced more challenges because of limited access to finance in a climate of high interest rates, higher marketing and distribution expenses, and a slower-than-expected demand for electric vehicles. These elements, combined with disruptions in the worldwide supply chain, put a burden on Fisker’s financial resources and paralleled problems that forced other EV companies to declare for bankruptcy, including Proterra, Lordstown, and Electric Last Mile Solutions.
