(Bloomberg) – Fisker Inc. filed for bankruptcy on Monday, months after the electric vehicle startup halted production of its only model, the oft-defective Ocean SUV.
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The company listed between $500 million and $1 billion in assets, and between $100 million and $500 million in debt, in its petition filed in Delaware. The filing protects Fisker from creditors while it works out a plan to repay them.
Fisker is the second plug-in car company founded by Henrik Fisker – a famous designer of BMW and Aston Martin sports cars – to go bankrupt. A previous company, Fisker Automotive, filed for Chapter 11 protection in 2013 after a series of recalls spelled the demise of its battery supplier, a fellow recipient of U.S. Energy Department loans.
Follow The Big Take on Apple Podcasts, Spotify or wherever you get your podcasts. Read the transcript here.
The Demise of Fisker Inc. was more our own fault. The startup went public in 2020 as part of the wave of EV companies to capitalize on the pandemic-era boom in special purpose acquisition companies. Through the combination with a SPAC sponsored by Apollo Global Management Inc. left Fisker with about $1 billion in cash and helped the company close a deal with a subsidiary of Magna International Inc. which produces vehicles for Toyota, BMW and Mercedes-Benz, among others.
While production of the Fisker Ocean SUVs started on schedule in November 2022, the first SUVs lacked basic features, including cruise control. The California-based company told customers it would deploy the capabilities it promised them the following year through over-the-air software updates.
Software bugs delayed production for months, causing Fisker to repeatedly lower its forecasts. In February this year, influential YouTuber Marques Brownlee produced a video – This is the Worst Car I’ve Ever Review – that summarized a series of problems he encountered when borrowing an Ocean from a dealer in New Jersey. The video has been viewed more than 5.7 million times.
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Fisker produced 10,193 Oceans last year, but delivered only 4,929 vehicles to customers. The company attempted a dramatic pivot in early January by partnering with franchise dealers in North America in an effort to avoid selling SUVs directly to consumers.
In February, Fisker warned that there were significant doubts about its ability to continue operating. The following month, the company announced that it had secured $150 million from an existing lender, although the financing was conditional on Fisker securing investment from an unknown automaker. A week after that revelation, Fisker said talks with the automaker had ended without a deal.
Magna executives said on an earnings call last month that the company’s updated guidance for this year assumed no further production of Ocean SUVs. While the company laid off 400 to 500 people from its factory in Graz, Austria, the plant employs approximately 7,000 workers and continues to produce vehicles for BMW, Mercedes, Toyota and Jaguar Land Rover.
Fisker’s bankruptcy comes as EV makers struggle to adapt to slowing sales in the U.S. and much of Europe.
Researcher BloombergNEF last week lowered its sales forecasts for battery-electric vehicles through 2026, citing expectations for a slower shift away from combustion engines in key markets including the US, Germany and the UK.
Fisker follows a handful of other EV startups that are going bankrupt, including Charge Enterprises, the EV charging station installer that filed for Chapter 11 protection in March. Other EV manufacturers that have filed for bankruptcy include Lordstown Motors, Proterra and Electric Last Mile Solutions.
–With help from Monica Raymunt.
(Updates with background starting in first paragraph.)
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