EV Startup Fisker Goes Bankrupt After Recalling All Of Its Ocean SUVs

Troubled electric vehicle (EV) startup Fisker has filed for Chapter 11 bankruptcy in the US on Monday, attributing the move to “various market and macroeconomic headwinds that have impacted our ability to operate efficiently.”

As reported by TechCrunch, Fisker has a notable list of creditors which include major companies like Adobe, Slack’s parent company Salesforce, and SAP among many others. The bankruptcy filing underscores the challenges that have plagued the company both financially and operationally for years: lawsuits that keep coming up due to lemon law violations plus wages not paid. This year in March alone, they lost track temporarily of millions of dollars, leading to hundreds losing their jobs then — with more layoffs happening last month — additional staff members being let go as well. At this point in time, US transportation regulators are conducting three investigations into Fisker.

The most recent car by Fisker, the Ocean SUV, was unveiled in the previous year following its announcement at CES in 2020. Initially expected to launch in 2022, the Ocean SUV was postponed till 2023. According to the company’s quarterly earnings report disclosed in February, only about 10,000 units were made with less than 5,000 delivered to customers in the last year.

This month, all Ocean SUVs were recalled due to safety and compliance issues. US regulators identified problems with the SUV’s instrument panel display for its warning lights and a defect that could cause the vehicle to suddenly lose drive power. Delivery of the Ocean SUVs was slower than anticipated due to “delays with suppliers” and other challenges such as “rising interest rates” and difficulties in finding “enough skilled labor,” Henrik Fisker, the company’s CEO and chairman, previously stated.

Financial difficulties are not new for Fisker Group. The company experienced severe financial difficulties in 2013, which resulted in the layoff of 75% of its employees. Fisker had been in discussions about a possible partnership or investment with a major automaker earlier this year, but those conversations broke down. Its problems were made worse in March when the company was delisted from the New York Stock Exchange.
Fisker’s journey from a promising electric vehicle company to bankruptcy highlights the extreme volatility and difficulties faced by the electric vehicle market.