Fisker, the Manhattan Beach-based electric vehicle startup, appears to be on the brink of collapse, following in the footsteps of other failed EV companies such as Aptera and Detroit Automotive.
The company’s recent struggles illustrates the challenges faced by the EV industry, particularly when government intervention attempts to force a shift towards electric vehicles without sufficient consumer demand.
According to recent regulatory filings, Fisker has warned investors of its precarious financial situation, stating that it may run out of cash by the end of the year.
RELATED: EV Maker Rivian Halts Construction at Massive Taxpayer Subsidized Manufacturing Plant in Georgia
The company has engaged advisors to prepare for a potential bankruptcy and plans to halt production for six weeks starting Monday to align inventory levels and pursue strategic and financing initiatives.
Fisker to Pause Production for Six Weeks https://t.co/toKq2ZyJn5
— WSJ Business News (@WSJbusiness) March 18, 2024
CEO Henrik Fisker acknowledged the industry’s turbulence, stating, “We are aware that the industry has entered a turbulent, and unpredictable period.”
Fisker’s financial woes are evident in its recent actions. The company failed to make an $8.4 million interest payment on convertible notes due in 2026, despite having the liquidity to do so.
It also missed the deadline to file its annual report with the U.S. Securities and Exchange Commission.
As of Friday, Fisker had only $120.9 million in cash on hand, leading the company to conclude that there is “substantial doubt as to [its] ability to continue as a going concern.”
In an attempt to cut costs, Fisker has laid off 15% of its workforce and shifted from a direct-sale model to dealerships. The company has also been in “continuing negotiations” with a large automaker for a potential deal, although progress remains unclear.
Electric-vehicle startup Fisker has hired restructuring advisers to assist with a possible bankruptcy filing #ClimateScam https://t.co/9psrMdkp9N via @WSJ
— Tom Fitton (@TomFitton) March 14, 2024
The Fisker Ocean, the company’s flagship SUV, has faced its own set of challenges.
More than 100 complaints have been filed with the National Highway Traffic Safety Administration, which is investigating reports of sudden power loss and front hoods flying open at high speeds.
RELATED: After Blowing Huge Bet on EVs Hertz CEO Stephen Scherr to Resign
Additionally, shareholders have sued Fisker’s founders and board of directors in federal court, alleging a failure to disclose material weaknesses in financial reporting, inaccurate accounting, and delivery limitations.
As Fisker’s stock price plummets, trading at just 15 cents per share compared to its February 2021 peak of $28.50, the company’s struggles serve as a stark reminder of the risks associated with government intervention in the EV market.
