Electric Vehicle Startup Fisker Declares Bankruptcy

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Fisker Group Inc., a division of the company, has filed for Chapter 11 bankruptcy in Delaware. The filing indicates that the company has estimated assets ranging from $500 million to $1 billion and liabilities between $100 million and $500 million. According to the court documents, Fisker has between 200 to 999 creditors.

Late on Monday, U.S. electric vehicle manufacturer Fisker filed for bankruptcy protection after negotiations with a major automaker fell through, leaving the startup vulnerable due to its rapid expenditure of funds to launch its Ocean SUV in the U.S. and Europe.

The specific division involved, Fisker Group Inc., sought Chapter 11 protection in Delaware, documenting estimated assets of $500 million to $1 billion against liabilities ranging from $100 million to $500 million. The filings also noted that Fisker has between 200 and 999 creditors. The breakdown of discussions in March with a significant automaker forced Fisker to explore strategic options, which included potential in-court or out-of-court restructurings and exploring the capital markets.

While the automaker involved wasn’t identified by Fisker, reports indicated that Nissan was in late-stage discussions to invest in the company. Founded by noted automotive designer Henrik Fisker, the company had previously expressed concerns in February about its ongoing viability and had halted investments in future endeavours pending a partnership deal.

Additionally, Fisker announced a 15% reduction in its workforce due to challenges in marketing its Ocean EVs. The company manufactured over 10,000 vehicles in 2023, which was less than a quarter of its initial projection, with only about 4,700 delivered.

Compounding these challenges, the U.S. auto safety regulator initiated a preliminary investigation last month into certain 2023 Ocean EVs produced by Fisker. This came on top of existing inquiries by the National Highway Traffic Safety Administration (NHTSA) into three previous incidents involving these vehicles.

The firm’s difficulties were exacerbated by tight capital access in a high-interest rate environment, increased costs related to marketing and distributing its vehicles, and slower-than-anticipated demand for EVs. These factors, along with global supply chain disruptions, not only strained Fisker’s financial resources but also mirrored issues that led other EV companies like Proterra, Lordstown, and Electric Last Mile Solutions to file for bankruptcy.

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