What Fisker's Bankruptcy Filing Means

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Automotive Editor

Based out of the Washington, D.C. area, Joel Patel is an automotive journalist that hails from Northern Virginia. His work has been featured on various automotive outlets, including Autoweek, Digital Trends, and Autoblog. When not writing about cars, Joel enjoys trying new foods, wrenching on his car, and watching horror movies. 

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, Automotive Editor - June 19, 2024
2024 Fisker Ocean

After numerous reports and Fisker itself claiming that things for the automaker were grim, Fisker officially filed for Chapter 11 bankruptcy protection on June 17. The decision is one that the entire industry expected, as Fisker was struggling with demand for the Ocean, its only electric vehicle on sale, significant spending, build quality issues, and finding another automaker to partner with. It marks the second time that Henrik Fisker has started an automotive company and filed for bankruptcy.

In a press release confirming that it will be filing for Chapter 11, Fisker claimed that “like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently. 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.”

According to Automotive News, Fisker Group Inc., the operating subsidiary of Fisker Inc., reportedly has estimated its assets to be in the range of $500 million to $1 billion and liabilities to be between $100 million and $500 million. The automaker reportedly filed the Chapter 11 petition in U.S. Bankruptcy Court in Wilmington, DE and filed protection from creditors in Austria in May, claims the outlet.

Chapter 11 is a chapter of the Bankruptcy Code and is called a “reorganization” bankruptcy, as it allows the organization filing bankruptcy to continue operating its business, borrow new money (depending on court approval), keep possession and control of its assets, and has the powers and duties of a trustee. The reason this type of bankruptcy is referred to as a “reorganization” one is because it allows a company to propose a plan to keep the business open and pay creditors in a timely manner.

2024 Fisker Ocean Dashboard

In its statement, Fisker claims that its manufacturing pause will remain in place, so the automaker won’t be making any more Ocean SUVs. The automaker is looking to keep its “reduced operations” going, which includes paying employees, “preserving certain customer programs,” and compensating vendors.

Shoppers who are interested in purchasing a Fisker Ocean will have to find a model that has already been built. Fisker’s website is still working and showcases Ocean SUV inventory throughout the country based on states. Purchasing a Fisker Ocean shouldn’t be too difficult, depending on where you live, but finding a dealership to service the vehicle and get parts for the EV may be hard. Fisker only has 12 franchised dealers in the country who will probably stop selling and servicing Fiskers once their inventory is cleared out.

Fisker’s issues started fairly early on. The automaker was launched in 2016, had an initial public offering in 2020, and brought its first and only EV, the Ocean, to market in 2023. Fisker decided to go down the route of direct-to-customer sales, as the automaker decided to create a dealer network at the beginning of 2024. The Ocean was marred by terrible reviews citing the vehicle’s horrible build quality, numerous tech issues, and poor overall performance. The National Highway Traffic Safety Administration (NHTSA) started to investigate the Ocean earlier this February because of “unintentional vehicle movement” and then again because of faulty doors in April.

Fisker’s attempt to stay away from declaring bankruptcy started in earnest in February 2024. In the second month of the year, the automaker reported a fourth-quarter net loss of $463 million and announced a cut of 15% of its workforce to trim costs. To stay afloat, the automaker stated that it would be looking into a partnership, but that never worked out. Fisker’s supplier, Magna Steyr, built 10,000 Ocean SUVs and Fisker sold less than half of them globally.

Pictured: 2024 Fisker Ocean

Source: Automotive News (Subscription Required)

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, Automotive Editor

Based out of the Washington, D.C. area, Joel Patel is an automotive journalist that hails from Northern Virginia. His work has been featured on various automotive outlets, including Autoweek, Digital Trends, and Autoblog. When not writing about cars, Joel enjoys trying new foods, wrenching on his car, and watching horror movies. 

Follow On: Twitter

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