Electric SUV maker Fisker files for bankruptcy

London
CNN
 — 

Fisker, a US electric vehicle startup, said Tuesday it had filed for bankruptcy.

The company had already warned it was in trouble. When it published quarterly earnings in February, it said it might not have enough money to survive another year. Fisker added then that it was in discussions with an existing investor about possibly putting more money into the company.

On Tuesday, a Fisker spokesperson said in a statement: “Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently.”

While growth in global EV sales is slowing, Fisker has also grappled with its own problems.

Its sole product is the Fisker Ocean electric SUV. Last year, around 10,000 of the SUVs were made but only about half had been delivered to customers, the company said in its earnings report in February.

The Ocean was also the subject of a review that month by American YouTuber Marques Brownlee titled, “This is the Worst Car I’ve Ever Reviewed.”

“Do not buy this version of the Fisker Ocean,” reads the video’s description. The video, which sent Fisker’s stock plunging after its release, has racked up 5.7 million views so far.

In a recent interview with Automotive News, the company’s founder and CEO Henrik Fisker admitted that the Ocean had quality problems. He blamed the issues on software from different suppliers that worked poorly together and said they were being addressed through updates.

Besides its own troubles, Fisker has had to deal with a jump in competition from established automakers since the company was established in 2016. Now, besides Tesla, heavyweights like Hyundai, Kia, Ford and General Motors offer electric SUVs that are similar to the Ocean but without the risks of dealing with an unknown startup. And China’s BYD has soared to challenge Tesla as the global market leader in EVs.

Still, Fisker’s bankruptcy is another sign of the broader headwinds and speed bumps facing the burgeoning EV industry. Worldwide sales of plug-in vehicles could rise 21% this year, according to recent forecasts by the International Energy Agency. While significant, that’s a smaller rise than the 35% increase in 2023.

In the United States and Europe, one barrier to faster adoption of electric cars is their higher average price compared with new conventional cars. Another is a lack of public charging infrastructure.

Fisker filed for bankruptcy Monday, choosing the common Chapter 11 route, which allows companies to try to resolve their financial problems through reorganization. The startup said Tuesday that it was in “advanced discussions with financial stakeholders” about the sale of its assets.

Fisker had also previously said it was in rescue talks with a major established automaker but that those talks had fallen apart without a deal.