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Fisker Inc. Declares Bankruptcy Amid Production Woes of Ocean SUV
Fisker Inc., the electric-vehicle startup, filed for bankruptcy, citing between $500 million and $1 billion in assets and between $100 million and $500 million in liabilities in a Delaware filing. This filing will protect the company from creditors as it devises a repayment plan. Fisker is the second electric vehicle company founded by designer Henrik Fisker to file for bankruptcy, following the collapse of Fisker Automotive in 2013 due to supplier issues.
The downfall of Fisker Inc. appears to be more self-inflicted. The company went public in 2020, leveraging the surge of special purpose acquisition companies (SPACs) during the pandemic. Partnering with a SPAC sponsored by Apollo Global Management Inc., Fisker secured about $1 billion in cash and struck a manufacturing deal with a Magna International Inc. subsidiary, which also produces for major brands like Toyota, BMW, and Mercedes-Benz.
However, once production of the Ocean SUV began in November 2022, significant issues emerged. The initial models lacked essential features such as cruise control, and the company promised to add these later via over-the-air updates. Persistent software bugs hampered production, forcing Fisker to drastically reduce its forecasts multiple times. A critical review by a prominent YouTuber in February, which described the vehicle as problematic, amassed over 5.7 million views and further hurt the brand's reputation.
In 2022, Fisker produced 10,193 Oceans but only delivered 4,929 to customers. By early January, the company attempted a strategic shift by pursuing partnerships with franchised dealers in North America, moving away from direct sales. Yet by February, Fisker expressed significant doubts about its capacity to sustain operations. Although it managed to secure $150 million from an existing lender in March, the financing depended on further investment from an automaker, which ultimately fell through.
Despite these efforts, the outlook remained grim. Magna International executives indicated during a recent earnings call that their forecasts for the year assumed no further production of Ocean SUVs. Consequently, Fisker had to lay off 400 to 500 employees at its facility in Graz, Austria, although the plant continues to manufacture vehicles for other automakers like BMW, Mercedes, Toyota, and Jaguar Land Rover.
Fisker’s bankruptcy occurs at a challenging time for EV manufacturers, who are witnessing slowing sales in key markets such as the US and Europe. Recently, BloombergNEF revised its battery-electric vehicle sales projections downward through 2026, predicting a slower transition away from combustion engines in major markets. Fisker's bankruptcy follows a troubling trend among EV startups, with companies like Charge Enterprises, Lordstown Motors, Proterra, and Electric Last Mile Solutions also seeking bankruptcy protection.
