U.S. EV maker Fisker filed for bankruptcy protection on Monday, June 17, after months of rapid cash spent trying to deliver its Ocean SUVs to U.S. and European customers. The company is looking to sell its assets and restructure its debt. Henrik Fisker’s second EV bankruptcy occurred after failed efforts to secure investments, including from Nissan, which meant that it was denied $350 million in funding from an unnamed investor that was contingent on the automaker’s investment. Fisker Automotive’s first EV venture went bankrupt in 2013, following problems with a battery supplier and losing 300 of the company’s $100,000 plug-in hybrid Karmas in a hurricane.

The list of failed EV startups is growing after electric bus manufacturer Proterra, pickup maker Lordstown Motors, Electric Last Mile Solutions and bus manufacturer Arrival also declared insolvency. When interest rates started rising, these companies raced against time to reach scale, which was made harder when Tesla started a price war last year. Other EV companies are cutting costs or delaying investments, in an effort to conserve their remaining cash. Given competition from Chinese and U.S. EV manufacturers, it is unlikely that Fisker will be the last small EV maker to fall.

Fisker’s current challenges underline the hurdles facing young carmakers that have sought to emulate Tesla’s success. Many of them raised billions of dollars from investors in public debuts but used up their cash reserves as they spent heavily to develop new models and build out factories and sales centers, all while losing money on every vehicle sale. EV makers like Fisker do not have the profits from gasoline and diesel vehicle sales that traditional automakers have to fall back on and cover their losses. Fisker lost about $150,000 per vehicle delivered last year.

Fisker, which raised over $1 billion from investors to launch its operations, spent almost all its cash reserves and defaulted on a debt agreement with a key investor. Last summer, Fisker started delivering its first electric model, the Ocean SUV, just as the market for battery-powered vehicles was starting to wane and signs were emerging that consumer demand for electric vehicles was less than originally expected, after wealthy buyers had bought their Teslas and Lucids. At the beginning of the year, Fisker tested a direct-to-consumer sales model using dealerships, which failed to produce sales, and it was left with thousands of unsold vehicles.

Fisker had originally obtained a $529 million loan commitment in 2009 from the Obama Administration, which ultimately meant a loss of $139 million in taxpayer money.  The reincarnated Fisker was thus unable to secure federal funding, and instead was reliant upon the promise of subsidies and other incentives for buyers to purchase its vehicles. Those subsidies fell short of overcoming obstacles and were limited to vehicles built in the United States.


Fisker sought to distinguish itself from more traditional carmakers by attempting to buy more of its hardware off-the-shelf and use software features to set the Ocean apart from other electric vehicles. Fisker’s SUV claimed a 360-mile range on a single battery charge, award-winning design and a starting price under $40,000. But software-related issues plagued the car maker. The National Highway Traffic Safety Administration (NHTSA) has been investigating customer reports of the Ocean rolling away or a loss of braking performance. According to Fisker, the braking issue was resolved with a software update and it is fully cooperating with NHTSA on its investigations.

Fisker raised more money the second time around and partnered with reputable suppliers, including contract manufacturer Magna Steyr and Chinese EV battery company Contemporary Amperex Technology. But the company’s problems were within the organization, mostly in its finance and accounting departments. It missed several deadlines to file its financial results with regulators, which it attributed to a lack of qualified accounting professionals. The company lost several top executives, including two chief accounting officers in less than a month.

Chief Financial Officer Geeta Gupta-Fisker said the company’s finance team struggled to keep pace with the growing complexity of its finances as vehicles went into production. Fisker built vehicles in Europe and shipped them to the United States for sale, a process that took over a month and created delays for buyers. Fisker ended 2023 having produced over 10,000 Oceans but only managed to deliver around 4,900 to customers. To get its electric vehicles to customers faster, Fisker switched to a traditional dealer model.

In late February, Fisker issued a warning that it risked running out of money this year. Executives tried but ultimately failed to raise more cash from investors, leaving the company with few options but to file for bankruptcy. In March, Fisker halted production of the Ocean for six weeks and talks with a large car company over a partnership ended without an agreement. The New York Stock Exchange informed Fisker that it was delisting the company’s shares, citing abnormally low-price levels. The delisting caused Fisker to default on a convertible debt agreement, putting it on the hook to repay around $180 million—more than the company had available.

In early April, Fisker appointed a restructuring expert to its board of directors and said it was examining its strategic options, including a potential restructuring and asset sale. Fisker’s cash reserves had fallen to around $50 million, and the company began laying off employees and closing down stores and warehouses. The remaining staff members had been told at the time their last day of work would be the end of June, if Fisker could not successfully negotiate, raise money or restructure its debt.

In the Chapter 11 bankruptcy filing in Delaware, its operating unit, Fisker Group Inc, estimated assets of $500 million to $1 billion and liabilities of $100 million to $500 million. Its 20 largest creditors include Adobe, Alphabet’s Google and SAP.


The EV market has seen several small companies, including Proterra, Lordstown and Electric Last Mile Solutions, file for bankruptcy in the past two years as they contended with weakening demand, fundraising hurdles, operational challenges from global supply chain issues and rising interest rates. Fisker has been added to that list as it files for its second bankruptcy protection. Fisker’s bankruptcy filing followed a troubled rollout of its Ocean SUV, which has been criticized by many customers and reviewers for quality issues. These EV companies rushed to compete with Tesla, but failed to gain traction as Tesla had years of experience and started a price war last year. It is likely that other small electric start-ups will also file for bankruptcy protection since they do not have the benefit that the traditional automakers have of using profits from gasoline vehicles to pay for losses from their EV manufacturing endeavors. Fisker’s failure is another illustration that government industrial policy creates more losers than winners.

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