Fisker automotive company, specializing in electric SUVs, declares bankruptcy
Struggling automaker Fisker openly acknowledged its fiscal struggles when it released quarterly earnings in February, stating it may run out of funds within another year. Fisker also mentioned discussions with a prior investor for potential funding.
In a statement on Tuesday, a Fisker representative stated, "Much like other electric vehicle companies, we've encountered numerous market and economic hurdles that obstruct our operational efficiency."
Despite a global rise in EV sales, Fisker has faced internal challenges.
Their only offering is the Fisker Ocean electric SUV. Out of approximately 10,000 vehicles produced last year, only around half were delivered to customers, as stated in the February earnings report.
Moreover, the Ocean was criticized in a review by American YouTuber Marques Brownlee with the title, "The Worst Car I've Ever Reviewed." In the description of the video, which caused Fisker's stock to plummet after release and has garnered 5.7 million views, it reads, "Do not buy this version of the Fisker Ocean."
In a recent interview with Automotive News, company founder and CEO Henrik Fisker admitted that the Ocean had quality issues. He attributed these problems to software from various suppliers that didn't work harmoniously and claimed they were being fixed through updates.
Apart from its issues, Fisker has faced steep competition from established automakers since its inception in 2016. Now, in addition to Tesla, heavy hitters like Hyundai, Kia, Ford, and General Motors offer electric SUVs comparable to the Ocean but without the risks associated with dealing with an unknown startup. China's BYD has also emerged as a formidable competitor, challenging Tesla as the global leader in EV sales.
Fisker's bankruptcy filing on Monday serves as another indicator of the broader issues and speed bumps that the fast-growing EV industry is facing. According to recent estimates by the International Energy Agency, worldwide sales of plug-in vehicles could increase by 21% this year. Whilst considerable, this is a smaller growth than the 35% increase observed in 2023.
In the U.S. and Europe, the higher average price of electric cars compared to new conventional cars, as well as a absence of public charging infrastructure, serve as obstacles to faster adoption of electric vehicles.
Fisker filed for bankruptcy under Chapter 11 on Monday, allowing them to attempt to resolve their financial problems through reorganization. The company stated on Tuesday that it was "in advanced discussions with financial stakeholders" regarding the sale of its assets.
Previously, Fisker had mentioned potential lifeline talks with a major established automaker, but these negotiations ended without reaching an agreement.
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Despite the positive trend in the electric vehicle market, Fisker's business challenges persisted, leading to discussions with potential investors for funding. Regardless of these discussions, Fisker's investing in the business sector ultimately didn't yield sufficient outcomes, resulting in bankruptcy filings.
