Fisker Files for Chapter 11 Bankruptcy
In a notable development for the electric vehicle sector, Fisker Inc. has filed for Chapter 11 bankruptcy protection to restructure its operations and liquidate assets. The filing, submitted late on Monday, follows numerous challenges, including funding difficulties and operational setbacks.
Financial Struggles and Market Competition
Fisker’s financial woes were aggravated by the highly competitive EV market. Founded by automotive designer Henrik Fisker, the company faced cash flow issues while trying to increase production of its Ocean SUVs. Earlier this year, Fisker expressed doubts about its ability to continue operations and failed to secure a vital investment from a major automaker, reportedly Nissan. This failure prevented an additional $350 million in funding from another investor, which was dependent on the automaker’s involvement.
Operational and Product Challenges
The company also encountered several operational challenges, particularly with the software and hardware in its Ocean SUVs. Consumer Reports described the vehicle as “unfinished business,” citing issues with braking, shifting into park, and door functionality. Despite transitioning to a dealership-based distribution model earlier this year to better manage inventory, Fisker still struggled to clear its stock of over 5,000 cars.
Asset and Debt Restructuring
In its Chapter 11 filing in Delaware, Fisker Group Inc. estimated its assets at $500 million to $1 billion and its liabilities at $100 million to $500 million. Major creditors include firms like Adobe, Alphabet’s Google, and SAP.
As Fisker Inc. works through its bankruptcy and asset sale, the EV market continues to evolve, with established and emerging players navigating a complex landscape of technological, financial, and competitive challenges.
