Electric vehicle startup Fisker filed for Chapter 11 bankruptcy protection in Delaware on Monday, aiming to sell assets and restructure debt after a series of missteps and a brutal market environment, Reuters reported. Founded by Henrik Fisker who is renowned for his design work with BMW and Aston Martin, the company struggled to ramp up production of its Ocean SUV, a vehicle plagued by software bugs and underwhelming reviews.
The company’s bankruptcy petition revealed assets estimated between $500 million to $1 billion, with liabilities ranging from $100 million to $500 million, Bloomberg reported. The move allows the automaker to shield itself from creditors as it seeks to restructure and address its financial obligations.
From Second Chance to Software Nightmares
This isn’t Henrik Fisker’s first rodeo. His previous venture, Fisker Automotive, went bankrupt in 2013. Fisker aimed for a comeback in 2020, merging with a special purpose acquisition company (SPAC) and raising over $1 billion; and helping it leverage partnerships with industry giants like Magna International Inc.
However, production woes plagued Fisker as the Ocean SUV, launched in November 2022, encountered critical software bugs. These issues led to delayed deliveries and forced the company to revise its sales forecasts repeatedly. A brutal review by influential YouTuber Marques Brownlee, who called the SUV as “the worst car I’ve ever reviewed,” further dented the automaker’s reputation and damaged consumer confidence. The company attempted to address the problems through software updates, but the damage was done.
Running Out of Road
Fisker’s financial situation also deteriorated rapidly. In a bid to navigate financial distress, the company explored various avenues, including shifting from direct-to-consumer sales to dealership models in North America. Despite these efforts, it struggled to stabilize operations, ultimately failing to secure crucial investments from potential partners, including negotiations with Nissan.
The startup’s troubles reflect the broader challenges facing the electric vehicle industry. Established automakers are flooding the market with competitive electric SUVs, squeezing out startups like Fisker. Additionally, high prices and a lack of charging infrastructure continue to hamper widespread EV adoption.
Meanwhile, the company’s Chapter 11 filing allows it to explore restructuring and potentially sell assets. Whether Fisker can salvage any part of its business remains to be seen.
