Fisker is reportedly getting ready for a potential bankruptcy filing, as indicated in a recent report by The Wall Street Journal. The decision follows Fisker’s disclosure to investors about its doubts in meeting financial obligations without an injection of cash.
The struggling EV startup, founded by Henrik Fisker, has enlisted bankruptcy advisors to aid in a possible filing, as reported by The Wall Street Journal. The company, or rather its supplier Magna, has manufactured approximately 10,000 Ocean electric crossovers, with only half sold. Debuting during a period of decreased EV demand last summer, the Ocean encountered notable challenges, including a regulatory investigation into braking problems and a scathing review from a leading tech critic. Faced with weak demand and an ineffective sales strategy, Fisker had to scale back production in December. The company reportedly seeks to transition from direct sales to a dealership model, although the feasibility of this shift remains uncertain.
With a billion dollars in debt as per its latest filing, Fisker faces an uphill battle to offset this liability through Ocean sales. Moreover, the company has emphasized its inability to innovate new products sans a major automaker’s support. While the possibility of Nissan considering a collaboration looms, the advantages for Nissan in such a partnership remain unclear. Magna, Fisker’s production partner, includes business with Fisker as a financial risk in its official documents.
Since its IPO, the company’s stock has plummeted over 97%, notes The Wall Street Journal. With no imminent product ready for release and lukewarm reviews for the Ocean, Fisker’s future appears uncertain. Compounded by production outsourcing to Magna in Austria, the absence of a domestic manufacturing facility deprives Fisker of key assets and the ability to claim federal tax credits. Given the challenging circumstances, the company appears to be bracing for tough times ahead.
Inquiries made to Fisker’s representatives by InsideEVs via email regarding this development have been met with a refusal to comment.