Joe Biden-backed EV startup Fisker filed for bankruptcy late Monday, planning asset sale amid manufacturing halt. Henrik Fisker, former Aston Martin and BMW designer, founded the company, which has filed for bankruptcy twice.
Fisker, an electric vehicle startup, filed for bankruptcy late on Monday, announcing plans to sell its assets following a recent manufacturing halt.
Henrik Fisker, the former designer of Aston Martin and BMW, formed the EV company, which has filed for bankruptcy twice. Fisker’s cars have received praise for their designs but have not been commercially successful.
Declaring that it is “in advanced discussions with financial stakeholders” to secure funding and sell itself, Fisker filed for Chapter 11 in a federal court in Delaware.
A company representative said in a statement, “Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently.”
According to a March report by Alan Neuhauser of Axios Pro, the company struggled to settle on a sales strategy and alternated between working with dealerships and selling directly to consumers.
In addition, it employed an unconventional production strategy by contracting with an Austrian manufacturer rather than producing the automobiles internally.
It’s the most recent in a string of EV startup failures, which also include Lordstown Motors and Electric Last Mile Solutions, as potential buyers object to high costs and charging issues.
Karl Brauer, executive analyst at iSeeCars.com, tells Axios, “This wasn’t hard to predict,” citing Fisker as a symbol of a “shakeout” occurring in the sector.
“They all looked at Tesla’s valuation and thought we will be the next Tesla,” Brauer says. “What a lot of these guys don’t want to admit is Tesla was unprofitable for 15 years. They had a heck of a runway.”
In 2020, Fisker was one of several electric vehicle (EV) firms that went public through special purpose acquisition companies, or SPACs.
The action was brought more than ten years after Henrik’s first electric vehicle firm, Fisker Automotive, filed for bankruptcy. Fisker Automotive failed despite receiving loans totaling hundreds of millions of dollars from the US government.
Eventually, a Chinese parts business bought the remaining parts of that company.
There are now significant uncertainties over the future of the Fisker Ocean, the company’s principal vehicle, as it announced that it will continue its manufacturing pause while it looks for a buyer.
Last year, GreatGameIndia reported that according to figures compiled by bankruptcydata.com, US corporations are filing for bankruptcy at the fastest pace since 2010. The data reveals that twenty-seven large debtors have filed for bankruptcy.