U.S. electric vehicle maker Fisker files bankruptcy protection late on Monday, looking to sell its assets and restructure its debt. The EV startup Fisker filed for bankruptcy, after succumbing to rapid cash burn to deliver its “Ocean” SUVs in the U.S. and Europe.
EV makers such as Proterra, Lordstown and Electric Last Mile Solutions have also gone bankrupt in the past two years. The reason being depleting cash reserves, fundraising hurdles and challenges in ramping up production due to global supply chain issues. Fisker’s cars were also under investigation by U.S. regulators.
Fisker EV startup files for bankruptcy
The Fisker EV startup founded by automotive designer Henrik Fisker, had flagged doubts about its ability to remain in business in February. In March its attempts to secure an investment from a big automaker failed, forcing it to rein in operations.
“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently,” Fisker said in a statement early on Tuesday.
“After evaluating all options for our business, we determined that proceeding with a sale of our assets under Chapter 11 is the most viable path forward for the company.”
It is also in advanced talks with financial stakeholders for debtor-in-possession financing, the company said, without giving further details.
Fisker sells assets
The company’s operating unit, Fisker Group Inc., filed for Chapter 11 bankruptcy in Delaware, listing estimated assets of $500 million to $1 billion and liabilities of $100 million to $500 million. It has about 200-999 creditors, per the court filing.
After Fisker failed to get funds from a large automaker it started exploring options, including in- or out-of-court restructurings and capital markets transactions.
Fisker layoffs
It paused manufacturing as well as investments in future projects until it secured an auto partnership and said it would cut its workforce by about 15%.
Fisker attempted to preserve cash in the last few months through several rounds of layoffs and other cost-cutting measures.
Fisker’s change in model
It also changed its business model. Earlier this year, the company shifted away from selling directly to customers and instead tried to partner with established dealers. Ultimately, the efforts weren’t enough to save the company from bankruptcy.
Fisker made over 10,000 vehicles in 2023, less than a quarter of its forecast, but delivered only about 4,700. Its cars are under regulatory investigation for certain incidents, including a probe started by the U.S. auto safety regulator last month.
Second bankruptcy by Henrik Fisker
This is the second vehicle company Henrik Fisker named after himself that has wound up in bankruptcy. His first effort, Fisker Automotive, was started in 2007 and filed for bankruptcy protection in 2013. That company similarly got its vehicle into production on the road before running into quality problems and other external factors that proved fatal.
