Fisker filed for bankruptcy late Monday, the latest electric vehicle start-up to fail after raising large sums of money from investors with high expectations.
Fisker’s bankruptcy filing, about a year after delivering its first vehicle and nearly four years after going public, came after months of doubt about its financial viability. The start-up has repeatedly cut production targets for its flagship Ocean SUV and faced escalating financial turmoil, warning of “substantial doubt” it could continue as a going concern in February, halting production in March and defaulting on a loan in May .
Talks with another automaker about a potential investment collapsed earlier this year, and the company’s battered stock, which once valued the company in the multibillion-dollar market, was delisted from the New York Stock Exchange for “unusually low” price levels .
Fisker had delivered more than 6,400 vehicles by mid-April, he said. It outsourced production and emphasized its design and software, such as a rotating dashboard display.
Fisker is seeking to sell its assets, which it listed in its bankruptcy filing as worth $500 billion to $1 billion. The company listed liabilities of $100 million to $500 million, with Adobe and Google among its biggest creditors.
“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate effectively,” Fisker said in a statement announcing its Chapter 11 filing, filed in Delaware.
Demand for electric vehicles, while strong, has frustrated auto industry executives, raising questions about big investments in new models and factories, even at market leaders like Tesla. Intensifying competition from Chinese automakers is also worrying Western executives.
Fisker was among EV start-ups that raised billions of dollars on the promise of rapid growth, debuting in the market by merging with special-purpose buyout companies in 2020 and 2021. Some of those companies, such as Lordstown Motors, Arrival and Proterra have also filed for bankruptcy. Others, like Canoo and Nikola, have struggled financially.
Fisker’s filing is the second time its founder, Henrik Fisker, has overseen a bankrupt auto company. His previous venture, Fisker Automotive, filed for Chapter 11 protection in 2013.
Sarah Foss, global head of legal and restructuring at financial services firm Debtwire, said that although Lordstown and Proterra became “much leaner companies” after selling assets through Chapter 11 bankruptcy, the road ahead for Fisker he can be difficult. That’s because the company appears to be entering bankruptcy while it’s still looking for a buyer for its assets and negotiating with financial shareholders, he said.
John Paul MacDuffie, a management professor at the University of Pennsylvania’s Wharton School, said software and design problems contributed to the start-up’s failure.
“It failed to master some of these critical aspects of being a car company,” he said.
