Electric SUV Maker Fisker Files for Bankruptcy
Electric vehicle startup Fisker has filed for bankruptcy, the company announced on Tuesday. The move follows warnings earlier this year about its financial instability, with the company admitting in February that it might not have enough funds to sustain operations through the next year. Discussions with an existing investor for additional funding have not resulted in a resolution.
A Fisker spokesperson attributed the bankruptcy to significant market and economic challenges. “Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently,” the spokesperson stated.
Fisker’s struggles are not unique as global electric vehicle (EV) sales growth slows. However, the company has also contended with its own specific issues. Fisker’s only product, the Ocean electric SUV, saw production of about 10,000 units last year, but only half were delivered to customers by February, according to the company’s earnings report.
The Fisker Ocean faced harsh criticism, notably from popular YouTuber Marques Brownlee, who labeled it “the worst car I’ve ever reviewed.” His review, which advised against purchasing the current version of the Ocean, has amassed 5.7 million views and significantly impacted Fisker’s stock value.
Henrik Fisker, the company’s founder and CEO, acknowledged the Ocean’s quality issues in a recent interview with Automotive News, attributing the problems to incompatible software from various suppliers. He mentioned that efforts were underway to resolve these issues through updates.
Competition from established automakers has intensified since Fisker’s inception in 2016. Companies like Tesla, Hyundai, Kia, Ford, and General Motors now offer electric SUVs that rival the Ocean, posing substantial competition. Additionally, China’s BYD has emerged as a formidable challenger to Tesla’s dominance in the global EV market.
Fisker’s bankruptcy filing is reflective of broader challenges within the EV industry. The International Energy Agency forecasts a 21% increase in global plug-in vehicle sales this year, a notable drop from the 35% growth observed in 2023. In regions like the United States and Europe, higher average prices for electric cars compared to conventional vehicles and insufficient public charging infrastructure are significant barriers to faster EV adoption.
Fisker has filed for Chapter 11 bankruptcy, a process that allows for financial reorganization. The company is in “advanced discussions with financial stakeholders” about selling its assets. Earlier rescue talks with a major automaker fell through without an agreement.
Fisker’s bankruptcy underscores the difficulties faced by newer entrants in the competitive and rapidly evolving electric vehicle market.
