The U.S. Department of Justice has challenged bankrupt electric vehicle maker Fisker’s plan to shift the cost of vehicle recalls to customers, deeming it illegal, according to a court filing on Monday.
Fisker, which filed for bankruptcy protection in June, has been struggling to restructure its debt and salvage its operations while managing multiple vehicle recalls related to defective door handles, faulty software, and noncompliance with safety standards.
As part of its bankruptcy plan, Fisker is required to fix defective and noncompliant vehicles “without charge” when the vehicle is brought in for repairs, as stipulated by the filing.
The Justice Department also stated that allowing vehicle owners to be reimbursed for out-of-pocket repair expenses would violate the National Traffic and Motor Vehicle Safety Act.
The case adds to Fisker’s legal woes, as the company is also under investigation by the U.S. Securities and Exchange Commission (SEC), which has expressed concerns over the lack of clarity regarding Fisker’s plans to preserve corporate records amid its liquidation process. Fisker has yet to comment on the Justice Department’s objections.
