Electric vehicle start-up Fisker files for bankruptcy
Fisker sought to differentiate itself with a midsize SUV, the Ocean. The company has sold more than 10,000 vehicles into the U.S. market, but warned in February that it was low on cash and had doubts about whether it could continue operating.
During the first half of 2024 it pursued various attempts to revive its business. It raised additional funds from investors and set up a new dealership model designed to increase its U.S. sales. It paused production in March to save money as it tried to arrange a rescue deal with an unnamed buyer. None of it was enough.
“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,” the company said Monday in a press release.
The current Fisker company is the second attempt by acclaimed car designer Henrik Fisker to establish a namesake EV brand. His previous effort was one of the earliest EV manufacturers in the United States, but it declared bankruptcy in 2013.
Gene Munster, an analyst with Deepwater Management who closely follows the EV sector, said this week’s bankruptcy filing says more about Fisker’s unique failures than the broader industry. Fisker simply failed to reach enough customers to justify the massive costs inherent to the auto business, Munster said.
“Not only is it hard to get a car company off the ground, but it’s even harder when demand for your company is going in reverse,” Munster said.
EV-specialty companies such as Tesla and Rivian sell directly to customers, an approach that Fisker tried initially. But this year it tried to boost sales by adopting traditional automakers’ reliance on independent dealers.
“Sales didn’t materialize and it was difficult for them to recruit dealers because the product was expensive and there were some questions about the quality too,” Munster said.
Yet industry trends didn’t help. Many EV enthusiasts bought Teslas or other vehicles years ago, with demand for EVs “pulled forward” into the three-year period from 2019 to 2022, Munster said.
