Fisker Inc. filed for bankruptcy on Monday, following the discontinuation of production for its sole model, the frequently malfunctioning Ocean SUV.
In its Delaware petition, the company reported assets ranging from $500 million to $1 billion and liabilities between $100 million and $500 million. This filing offers Fisker protection from creditors while it devises a repayment plan.
This marks the second bankruptcy for a plug-in car company founded by Henrik Fisker, a renowned designer of BMW and Aston Martin sports cars. His earlier venture, Fisker Automotive, filed for Chapter 11 in 2013 after numerous recalls led to the collapse of its battery supplier, which was also a recipient of US Energy Department loans.
Fisker Inc.’s downfall was more self-inflicted. The startup went public in 2020, riding the wave of EV companies benefiting from the pandemic-era boom in special purpose acquisition companies (SPACs). Merging with a SPAC sponsored by Apollo Global Management Inc. provided Fisker with around $1 billion in cash and secured a deal with a subsidiary of Magna International Inc., which manufactures vehicles for brands like Toyota, BMW, and Mercedes-Benz.
Production of the Fisker Ocean SUV began as planned in November 2022, but the initial vehicles lacked basic features such as cruise control. The California-based company assured customers that promised capabilities would be added via over-the-air software updates the following year.
However, software bugs delayed production for months, causing Fisker to repeatedly lower its forecasts. In February, influential YouTuber Marques Brownlee posted a video titled “This is the Worst Car I’ve Ever Reviewed,” detailing numerous issues he encountered with an Ocean SUV borrowed from a New Jersey dealership. The video has garnered over 5.7 million views.
Last year, Fisker produced 10,193 Ocean SUVs but delivered only 4,929 to customers. In early January, the company attempted a strategic shift by seeking partnerships with franchised dealers in North America, moving away from direct sales.
By February, Fisker expressed substantial doubt about its ability to continue operating. The following month, the company announced securing $150 million from an existing lender, contingent on obtaining investment from an unnamed automaker. A week later, Fisker revealed that negotiations with the automaker had failed.
Magna executives mentioned during a recent earnings call that their updated outlook for this year assumed no further production of Ocean SUVs. Although Magna laid off 400 to 500 workers at its Graz, Austria, facility, the plant, which employs about 7,000 people, continues to produce vehicles for BMW, Mercedes, Toyota, and Jaguar Land Rover.
Fisker’s bankruptcy coincides with challenges faced by EV manufacturers adapting to slowing sales in the US and much of Europe.
Last week, researcher BloombergNEF reduced its battery-electric vehicle sales projections through 2026, anticipating a slower transition from combustion engines in major markets like the US, Germany, and the UK.
Fisker joins several other EV startups in filing for bankruptcy, including Charge Enterprises, Lordstown Motors, Proterra, and Electric Last Mile Solutions.
