Much like Michael Scott, EV startup Fisker has declared bankruptcy (except Fisker did it the proper way, in court).
The move didn’t come as a surprise to auto industry observers: Signs of trouble had been mounting for months. The company’s flagship product, the Ocean SUV, has had numerous quality problems. It was running low on cash, prompting it to issue a going concern earlier this year about its ability to keep operating. It failed to find an investor or an automaker partner to help keep it going. And it recently laid off more than 15% of its workforce.
In a June 17 press release, Fisker acknowledged that it had filed for Chapter 11 bankruptcy protection, pointing to “various market and macroeconomic headwinds that have impacted our ability to operate efficiently.”
But while the filing comes during a challenging time for the EV sector—with automakers navigating cooling consumer demand and growing competition from China—experts and media reports largely say Fisker itself is to blame.
“It’s a significant feat to bring a product to market,” Paul Waatti, director of industry analysis at AutoPacific, told Tech Brew. “But there was a series of bad decisions happening in the background at the same time…It does highlight the fact that building vehicles for profit is one of the most difficult tasks to undertake.”
Fisker is led by automotive industry veteran Henrik Fisker, a former BMW designer whose previous startup, Fisker Automotive, went belly-up in 2013. He started the current company in 2016 and took it public via SPAC in 2020.
Fisker touted ambitious goals and set out to take on Tesla. But things didn’t go according to plan. The EV maker introduced the Ocean SUV in 2019, but the model has been beset by issues. Popular YouTube personality MKBHD called it “the worst car I’ve ever reviewed” earlier this year in a video that went viral.
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TechCrunch reported that the SUV’s problems have included “sudden power loss, trouble with the braking system, glitchy key fobs, problematic door handles that could temporarily lock them in or out of the car, and buggy software.” Fisker issued a recall for most Ocean SUVs just days before it declared bankruptcy.
And, Waatti noted, the company struggled to support its vehicles after they were on the road.
“You can have a bunch of cars on the market,” he said, “but if you can’t support them, if something needs to be fixed, consumers are ultimately going to push back.”
Fisker halted production earlier this year, and that stoppage remains in effect, according to the company statement. Fisker declined to comment beyond its statement on the bankruptcy filing.
Fisker reported having assets of between $500 million and $1 billion, the Associated Press reported. The company estimated its liabilities at between $100 million and $500 million, with between 200 and 999 creditors. The company, per its statement, said that it is “in advanced discussions with financial stakeholders regarding debtor-in-possession financing and the sale of its assets.”
Fisker is the second EV maker to file for bankruptcy protection in the past 12 months, after Lordstown Motors did so last June.
“At one time, there was [a] significant forecast for EV adoption and that obviously has been much slower than many anticipated in the beginning,” Waatti said. “But I think the issues that really were at fault here aren’t necessarily market-related as much as they were poor management.”
As for what’s next for the startup, Waatti isn’t optimistic about its prospects.
“At this point, it looks pretty grim,” he said. “But I guess there’s a ‘never say never,’ especially when it comes to Henrik.”