Fisker goes bankrupt for the second time
Less than two weeks after recalling 6,864 Fisker Oceans, the American marque has filed for Chapter 11 bankruptcy protection.
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Fisker Inc. was relaunched in 2016 by Danish designer Henrik Fisker, following the disastrous endeavor of an electric car that was the Fisker Karma. The company received a warning from the New York Stock Exchange earlier this year when its stock price dropped below $1. In response, Fisker implemented a 15 percent workforce reduction in February. This was then followed by a halt in production and a significant price reduction for the Ocean SUV in an attempt to improve its financial situation.
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The recall of nearly all 2023 Ocean SUVs was reported to the National Highway Traffic Safety Administration on June 5. This recall resulted from a software issue in the MCU and the Vehicle Control Unit (VCU), which may cause a loss of drive power. The car may automatically shift from Drive to Neutral to Park when coming to a halt. Documents associated with the recall imply that all of the recalled vehicles have defective MCU and VCU software. Fisker plans to address the problem with an over-the-air update.
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With no considerable profit projected for the foreseeable future, Fisker has now filed for Chapter 11 bankruptcy. This type of bankruptcy, known as "reorganization bankruptcy," serves as a protective measure to prevent the situation from deteriorating further.
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Henrik Fisker's first venture into the electric car market similarly ended in bankruptcy in 2013. The Karma was as visually pleasing as it was expensive. Fisker Inc. had received a $529 million loan commitment from the U.S. Department of Energy, but the company’s failure to meet production targets led to the suspension of the loan in 2011.
The recent filing follows Fisker's unsuccessful attempt to secure investment from a major automaker. Nearly four years ago, Fisker announced its intention to go public through a reverse merger with an Apollo-backed SPAC, which valued the company at $2.9 billion. This deal provided Fisker with over $1 billion in cash. However, due to underwhelming demand following the introduction of the Ocean EV, significant cash burn, and operational and product issues, the company could not generate sufficient revenue to stay afloat.
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A Fisker spokesperson said in a statement that the company is “proud of our achievements” but determined that Chapter 11 was the best option. “Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently,” the spokesperson said in a release. “After evaluating all options for our business, we determined that proceeding with a sale of our assets under Chapter 11 is the most viable path forward for the company.”
