Electric vehicle (EV) maker Fisker filed for bankruptcy on Monday after imploding due to its rapid cash burn to deliver its “Ocean” SUVs across the U.S. and Europe.
The news comes after several other electric car companies, including Proterra, Lordstown, and Electric Last Mile Solutions, filed for bankruptcy as demand weakens.
Fisker initially raised doubts about its ability to remain in business earlier this year before failing to secure an investment from a major automaker.
The collapse of its deal with the automaker resulted in Fisker being denied $350 million in funding from an unnamed investor.
“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 the Chapter 11 bankruptcy filing in Delaware Fisker Group Inc., the company estimated assets of $500 million to $1 billion and liabilities of $100 million to $500 million.
According to the filing, the company’s largest creditors include Adobe, Alphabet’s Google, and SAP.
CNBC reported:
Fisker went public in late 2020 in a merger with a blank-check firm, valuing it at $2.9 billion and infusing its balance sheet with more than $1 billion in cash.
The listing was a second chance for its Danish CEO and founder to build an auto business after his first venture, Fisker Automotive, filed for bankruptcy in 2013, falling victim to the 2008 financial crisis and a battery failure in the Karma hybrid sedan that had led to a substantial recall.
Henrik Fisker – a former design consultant for Tesla – had said at the time of the listing that Fisker wanted to be the Apple of the auto industry by outsourcing manufacturing of its cars.
The “asset light model” was meant to reduce development times for vehicles and lower costs to take a vehicle to the market.
Its Ocean SUV, however, was wrought with software and hardware issues, with Consumer Reports, an influential non-profit, calling the vehicle “unfinished business.”
The car is also under regulatory investigation for braking issues, problems with shifting into park and other modes, and failure of doors to open at times.
After delivering less than half of the more than 10,000 vehicles it produced last year, Fisker turned to a dealership-based distribution model in January, abandoning the direct-to-consumer approach pioneered by Tesla.
Fisker signed agreements for 15 U.S. dealer locations and 2 partners in Europe, but failed to clear its inventory of more than 5,000 cars.
“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,” Fisker said on Tuesday.
Of course, owning an EV is less cost-efficient than the Government makes out.
As we reported earlier this year, a study from the Texas Public Policy Foundation said EVs do not stand alone in comparison with other vehicles because of the “wide array of direct subsidies, regulatory credits, and subsidized infrastructure that contribute to the economic viability of EVs.”
“Adding the costs of the subsidies to the true cost of fueling an EV would equate to an EV owner paying $17.33 per gallon of gasoline. And these estimates do not include the hundreds of billions more in subsidies in the Inflation Reduction Act,” the report said.
According to the study, “would cost $48,698 more to own over a 10-year period without $22 billion in government favors given to EV manufacturers and ownerS.
READ: Reports Emerge of Drivers Becoming ‘Sick’ While Driving Electric Vehicles
