Fisker automaker petitions for bankruptcy protection
electric car maker Fisker is teetering on the brink of bankruptcy, in a tough battle against industry leader Tesla. Persistent financial woes, low sales, and missed investments have pushed the American brand to the edge of insolvency.
Fisker is now seeking bankruptcy protection in a move predicted for some time. The company sounded the alarm in late February, stating without immediate funds, its survival might be in jeopardy. Negotiations with a major automaker for investment have come up short. An interim financing round and sales of pre-built vehicles at a discount fell short of sealing a deal with the manufacturer. On Monday, Fisker passed through bankruptcy proceedings in Delaware under Chapter 11 of the U.S Bankruptcy Code.
The Fisker SUV model, the Ocean, encountered hurdles in reaching the market due to supplier-related problems. Criticism from early customers and industry experts pointed to software glitches and technical issues. In the past year, Fisker built approximately 10,200 Ocean vehicles and delivered around 4929 to customers.
Recognizing the failure of its direct sales model in the USA and Europe, Fisker attempted to transition to a dealer model since January. This year, Fisker aimed to deliver around 20,000 to 22,000 cars to customers and dealers. However, production came to a halt in mid-March to cut costs.
Since the start, Fisker aimed to challenge Tesla's dominance in the electric vehicle market. However, sales of electric vehicles have fallen short of expectations in recent years. Competitors like Rivian and Lucid are also reporting significant losses, but they benefit from funding by wealthy investors, while Fisker is running out of funds. Fisker CEO Henrik Fisker is facing bankruptcy for the second time since launching an auto company in 2013. He previously worked as an automobile designer for BMW and Aston Martin.
Read also:
Despite Fisker's attempts to compete with Tesla Motors in the electric car market, the financial struggles of its flagship model, the Ocean, and persistent financial woes have led Tesla's rival to the brink of insolvency. Despite securing a deal with a major automaker for investment and selling pre-built vehicles at a discount, Fisker Motors eventually filed for Chapter 11 bankruptcy protection.
