US electric vehicle start-up Fisker files for bankruptcy
A major electric carmaker, once valued at $4.4 billion, has filed for bankruptcy citing inflation woes and production problems.
On the Road
Don't miss out on the headlines from On the Road. Followed categories will be added to My News.
US electric carmaker Fisker said it filed for bankruptcy on Monday, citing inflation woes and production problems.
Fisker is in “advanced discussions with financial stakeholders” over the sale of its assets, according to a company statement announcing the bankruptcy proceedings published overnight into Tuesday.
“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently,” it added.
Fisker has been in financial difficulty for months and had already halted the production of its Ocean model, which was launched in 2022.
The company was valued at $US2.9 billion ($4.4 billion) when it went public in 2020, through a merger with a subsidiary of investment firm Apollo.
In February, founder Henrik Fisker reflected on a challenging 2023 with delays for parts, labour issues, and high inflation hitting demand.
US carmakers are facing tough competition from producers in China, with top American firm Tesla announcing more than 14,000 job cuts in April.
Fisker halted production of its only model, the Ocean compact SUV, in March.
Once touted as the most eco-friendly, sustainable EV on the market, the Ocean made extensive use of recycled materials.
Its carpet was regenerated nylon made from fishing nets pulled from the ocean, while other parts of the car used discarded rubber waste from tyre manufacturing.
Eschewing animal products, its interior featured eco-suede upholstery made from recycled polyester from T-shirts, as well as recycled bottles and plastics.
But the Ocean was plagued with quality issues, with owners citing sudden power losses, glitchy key fobs and even claims of hoods flying open, Wired reported.
Even Fisker’s management were affected, with board member Wendy Greuel and Geeta Gupta Fisker — the company’s chief financial officer and chief operating officer and wife of Henrik Fisker — both experiencing power shutdowns while driving the car.
Fisker had hinted late last year that it was planning on bringing the Ocean to Australia, after starting deliveries in several international markets including Europe.
Announcing its financial results in February, Fisker revealed it made $US273 million ($410 million) in sales in 2023 but was more than $US1 billion ($1.5 billion) in debt, with net losses of nearly $US762 million ($1.1 billion).
“2023 was a challenging year for Fisker, including delays with suppliers and other issues that prevented us from delivering the Ocean SUV as quickly as we had expected,” Mr Fisker said in a statement at the time.
“We also encountered unexpected headwinds in our efforts to establish a direct-to-consumer sales model in both North America and Europe at the same time. There were a number of unanticipated challenges, including rising interest rates, finding enough skilled labour, and identifying appropriate real estate locations to make the DTC model function effectively.”
The company produced more than 10,000 vehicles last year but only managed to deliver fewer than half to customers.
Mr Fisker said the company had “put a plan in place to streamline the company as we prepare for another difficult year”, and would focus on “building brand awareness, carving out market share with the Fisker Ocean, streamlining our operations, closing a strategic OEM [original equipment manufacturer] partnership, and building long-term value for our shareholders”.
But Fisker had warned there was “substantial doubt about its ability to continue as a going concern” and said it was in talks with a large investor, reportedly Nissan, about “potentially making an additional investment in the company”.
The talks ultimately fell through, reportedly resulting in a loss of $US350 million ($525 million) in funding.
In its Chapter 11 bankruptcy filing, Fisker said it had estimated assets of $US500 million ($750 million) to $US1 billion ($1.5 billion) and liabilities of $US100 million ($150 million) to $US500 million ($750 million).
Originally published as US electric vehicle start-up Fisker files for bankruptcy
Teen dies after car collides with tree
A teenager has died and three others are injured after a car smashed into a tree near Port Stephens.
Why Chinese-made EVs are taking over
Chinese electric vehicle makers are taking the Australian market by storm. But should you jump on the bandwagon? We delve into the pros, cons.