EV Maker Fisker Files for Bankruptcy After Its Glitchy SUV Flops
(Bloomberg) — Fisker Inc. filed for bankruptcy on Monday, months after the electric-vehicle startup stopped production of its only model, the oft-malfunctioning Ocean SUV.
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The company listed between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities, 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 started by Henrik Fisker — a famed designer of BMW and Aston Martin sports cars — to end up in bankruptcy. An earlier venture, Fisker Automotive, filed for Chapter 11 protection in 2013 after a series of recalls spelled the downfall of its battery supplier, a fellow recipient of US Energy Department loans.
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The undoing of Fisker Inc. was more self-inflicted. The startup went public in 2020 as part of the wave of EV companies to benefit from the pandemic era boom in special purpose acquisition companies. Combining with a SPAC sponsored by Apollo Global Management Inc. left Fisker with roughly $1 billion in cash and helped the company land a deal with a Magna International Inc. subsidiary that manufactures vehicles for the likes of Toyota, BMW and Mercedes-Benz.
While Fisker Ocean sport utility vehicle production started on schedule in November 2022, the first SUVs lacked basic features including cruise control. The California-based company told customers it would deploy capabilities it had promised them the following year, via over-the-air software updates.
Software bugs ended up slowing production for months, leading Fisker to repeatedly slash its forecasts. In February of this year, influential YouTuber Marques Brownlee produced a video — This is the Worst Car I’ve Ever Reviewed — that summarizes a series of issues he experienced while borrowing an Ocean from a New Jersey dealership. The video has racked up more than 5.7 million views.
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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, seeking out partnerships with franchised dealers in North America in a move away from selling SUVs directly to consumers.
By February, Fisker warned there was substantial doubt about its ability to continue operating. The following month, the company announced it had secured $150 million from an existing lender, though the financing was contingent on Fisker securing investment from an unidentified automaker. A week after that disclosure, Fisker said that talks with the carmaker had ended without a deal.
Magna executives said during an earnings call last month that the company’s updated outlook for this year assumed no further production of Ocean SUVs. While the company laid off 400 to 500 people from its facility in Graz, Austria, the plant employs around 7,000 workers and continues to manufacture vehicles for BMW, Mercedes, Toyota and Jaguar Land Rover.
Fisker’s bankruptcy comes as EV makers struggle to adapt to slowing sales in the US and across much of Europe.
Researcher BloombergNEF last week pared back its battery-electric vehicle sales projections through 2026, citing expectations for a slower shift away from combustion engines in major markets including the US, Germany and the UK.
Fisker follows a handful of other EV startups into bankruptcy, including Charge Enterprises, the installer of EV charging stations that filed for Chapter 11 protection in March. Other EV makers that have filed for bankruptcy include Lordstown Motors, Proterra and Electric Last Mile Solutions.
–With assistance from Monica Raymunt.
(Updates with background starting in the first paragraph.)
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