EV startup Fisker files for bankruptcy, aims to sell assets

EV startup Fisker files for bankruptcy, aims to sell assets

Fisker CEO Henrik Fisker introduces the all-electric off-road Ocean called the Force E during its inaugural “Product Vision Day” in Huntington Beach, California, on August 3, 2023. 

Frederic J. Brown | Afp | Getty Images

U.S. electric vehicle (EV) maker Fisker filed for bankruptcy protection late on Monday, looking to sell its assets and restructure its debt, after succumbing to rapid cash burn to deliver its “Ocean” SUVs in the United States and Europe.

EV makers such as Proterra, Lordstown and Electric Last Mile Solutions have also gone bankrupt in the past two years due to depleting cash reserves, fundraising hurdles and challenges in ramping up production due to global supply chain issues. Fisker’s cars were also under investigation by U.S. regulators.

The company, founded by automotive designer Henrik Fisker, had flagged doubts about its ability to remain in business in February and a month later, its attempts to secure an investment from a big automaker failed, forcing it to rein in 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 said in a statement early on Tuesday.

“After evaluating all options for our business, we determined that proceeding with a sale of our assets under Chapter 11 is the most viable path forward for the company.”

It is also in advanced talks with financial stakeholders for debtor-in-possession financing, the company said, without giving further details.

The company’s operating unit, Fisker Group Inc., filed for Chapter 11 bankruptcy in Delaware, listing estimated assets of $500 million to $1 billion and liabilities of $100 million to $500 million. It has about 200-999 creditors, per the court filing.

After Fisker failed to get funds from a large automaker — which Reuters had reported to be Japanese automaker Nissan — it started exploring options, including in- or out-of-court restructurings and capital markets transactions.

It paused manufacturing as well as investments in future projects until it secured an auto partnership and said it would cut its workforce by about 15%.

Fisker made over 10,000 vehicles in 2023, less than a quarter of its forecast, but delivered only about 4,700. Its cars are under regulatory investigation for certain incidents, including a probe started by the U.S. auto safety regulator last month.

Original news source Credit: www.cnbc.com

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