Fisker, the electric vehicle (EV) manufacturer, filed for bankruptcy protection late on Monday, initiating plans to sell its assets and restructure its debt. The move comes as the company faced challenges related to cash flow, particularly in delivering its “Ocean” SUVs in the United States and Europe, leading to rapid cash burn.
Alongside Fisker, other EV makers such as Proterra, Lordstown, and Electric Last Mile Solutions have also declared bankruptcy in recent years. These companies have struggled with depleting cash reserves, difficulties in fundraising, and challenges in scaling up production, exacerbated by global supply chain disruptions.
See also: Fisker Faces Ocean SUV Power Loss Recall in North America and Europe
Founded by automotive designer Henrik Fisker, the company had expressed concerns about its financial sustainability in February. Despite efforts to secure investment from a major automaker in March, the company was unsuccessful, leading to a contraction in its operations.
“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently,” Fisker stated in a press release early on Tuesday.
In pursuit of its restructuring goals, Fisker is in advanced discussions with financial stakeholders for debtor-in-possession financing, although specific details were not disclosed.
See also: Fisker Faces Dire Straits: Offers Employees Steep Discounts on Remaining Ocean SUVs
The company’s operating unit, Fisker Group Inc, filed for Chapter 11 bankruptcy in Delaware, reporting estimated assets of $500 million to $1 billion and liabilities of $100 million to $500 million. It has between 200 and 999 creditors, according to the court filing.
Following its inability to secure funding from a major automaker, which was reported by Reuters to be Japanese automaker Nissan (7201.T), Fisker explored various options, including in-court and out-of-court restructurings, as well as capital markets transactions.
See also: Fisker EV Startup Faces Layoffs Amid Funding Struggles
Production and investments in future projects were put on hold until an auto partnership was secured, leading to a reduction of about 15% in its workforce.
In 2023, Fisker manufactured over 10,000 vehicles, significantly below its initial forecast, and delivered approximately 4,700 units. The company’s vehicles are currently under regulatory scrutiny for various incidents, including a recent probe initiated by the U.S. auto safety regulator.
