Fisker filed for Chapter 11 bankruptcy protection late on Monday, ending months of speculation over the future of the company. Now the EV maker is looking to sell its assets and restructure its debt after pausing production of is sole car model back in March.
To anyone familiar with the Ocean all-electric SUV, the news of Fisker’s bankruptcy may have been predictable. WIRED tested the Fisker Ocean in July 2023 but, due to the obviously unfinished nature of the test car, was left in the unprecedented position of being unable to score or rate the EV. Our own test Ocean was plagued with squeaky pedals, an inoperative California mode (where the EV drops all its windows save the windscreen) forcing a switch in car mid-test, and poor handling.
After manufacturing issues and cash flow problems, Fisker admitted during its quarterly earnings in February that it might not have enough money to survive another year, and decided to pause car production, initially for six weeks. Reports began claiming it had been considering a possible bankruptcy filing. Fisker reported that it made $273 million in sales last year but was more than $1 billion in debt. It also issued a warning that there was “substantial doubt” about its ability to stay in business. It never resumed production.
The company, founded by car designer Henrik Fisker, was looking for a potential lifeboat. This resulted in negotiations with “a large automaker” for investment, joint development of one or more electric vehicle platforms, and to fund its North America manufacturing.
Such negotiations, reportedly with Nissan, failed to conclude positively, an outcome signaled even at the time by Fisker itself as it issued a statement saying “any transaction would be subject to satisfaction of important conditions, including completion of due diligence and negotiation and execution of appropriate definitive agreements.” The collapse of these talks reportedly resulted in a loss of $350 million in funding.
In the Chapter 11 bankruptcy filing in Delaware, Fisker has estimated assets of $500 million to $1 billion, and liabilities of $100 million to $500 million, and among its 20 largest creditors named Adobe, Google, and SAP.
Fisker’s rapid decline is a far cry from recent success in 2020, when the company went public with a valuation of $2.9 billion, affording the EV maker more than $1 billion in cash.
Since then, EV sales in the US have slowed more broadly, but Fisker has been especially badly affected. The company inevitably lost a degree of quality control when it ceded manufacturing to Canada-based supplier Magna, and subsequently build and software issues of its Ocean SUV surfaced. Since launch, the model has been dogged by quality problems, with owners citing sudden power losses, glitchy key fobs and sensors, and even allegations of hoods flying open.
The Ocean’s myriad issues embarrassingly caught out Fisker staff, too, with board member Wendy Greuel losing power on a public road shortly after taking deliver of the EV. Similarly, according to a cache of internal documents viewed by TechCrunch, Geeta Gupta Fisker, the company’s chief financial officer, chief operating officer, and cofounder Henrik Fisker’s wife, also experienced a shutdown in power while driving an Ocean.
Indeed, Fisker has had a checkered history beyond the Ocean. It was more than a decade ago when its eponymous owner, previously of BMW, Ford, and Aston Martin, last presented a car bearing his name. The Karma, a range-extender sports GT was dogged by problems, including a disastrous Consumer Reports test and fires. Fisker Automotive filed for bankruptcy in 2013.
Initially choosing to operate a direct-to-consumer sales model, after handing over to customers less than half of the more than 10,000 vehicles it produced last year, Fisker reverted to a traditional dealership sales model in January. Then in March the company drastically cut prices on its Ocean models in a desperate attempt to shift inventory.
Yesterday’s bankruptcy filing comes only a year after Fisker launched its Ocean all-electric vehicle to customers.
