Electric vehicle manufacturer Fisker filed for bankruptcy protection in Delaware after failing to secure new investment to restart production of its Ocean crossover. The company estimated its liabilities at between $100 million and $500 million, with assets between $500 million and $1 billion. Production of the Ocean was halted in March due to a cash crunch, with more than 10,000 vehicles built in 2023 but only 4,700 delivered to customers. Fisker tried to raise funds by forming a partnership with a major automaker and slashing prices on the Ocean to reduce a building glut.
However, beyond funding issues, Fisker also faced cooling demand for EVs and supply chain disruptions that delayed production ramp-up. The National Highway Traffic Safety Administration initiated a probe into the Ocean in May after complaints of door failures. This is the second bankruptcy for an EV startup led by Henrik Fisker, with the earlier company acquired by a Chinese battery company and now operating as Karma. Potential buyers could purchase Fisker’s assets, pay off its liabilities, and revive production. Fisker also presented designs for three additional vehicles—the Pear urban crossover, Alaska pickup truck, and Ronin convertible—that could potentially be launched.
**Challenges in Funding and Production**
The bankruptcy filing was a result of Fisker’s failure to secure new investment to restart the production of its Ocean crossover. The company’s attempt to form partnerships and reduce prices to boost sales were not enough to overcome funding challenges. Cooling demand for EVs and supply chain disruptions also compounded the issue, leading to the company’s cash crunch and production halt in March.
**Legal and Financial Implications**
Fisker’s Chapter 11 bankruptcy protection filing in Delaware estimated liabilities of $100 million to $500 million and assets of $500 million to $1 billion. The company is currently in talks with creditors for debtor-in-possession financing and the sale of remaining assets. The move comes roughly a year after Fisker started deliveries of the Ocean, its debut model, which faced production challenges with contract manufacturer Magna Steyr.
**Past and Present Bankruptcy**
This is the second instance of an EV startup led by Henrik Fisker going bankrupt, with the earlier company eventually acquired by a Chinese battery company and rebranded as Karma. Should a buyer with deep pockets emerge to purchase Fisker’s assets and liabilities, there is potential for the revival of Ocean production and launch of additional vehicles like the Pear, Alaska, and Ronin.
**Future Prospects and Revival**
Despite the bankruptcy filing, there is hope for the revival of Fisker through a potential buyer who could inject fresh capital into the company. With designs already in place for new vehicle models, there is a chance for Fisker to bounce back and re-enter the electric vehicle market. The bankruptcy process could lead to strategic partnerships, acquisitions, or restructuring that could pave the way for Fisker’s resurgence in the industry.