Electric vehicle startup Fisker is facing a perfect storm of financial woes and safety issues, raising concerns about its ability to stay afloat. The company announced a six-week pause in production of its Ocean SUV alongside a scramble to secure funding.
“Our ability to continue as a going concern is dependent upon our ability to raise additional debt or equity financings, enter into a strategic partnership with an OEM, and generate cash from the sale of vehicles. We need significant additional funding in the near term to execute our business plan and to continue our operations,” Fisker said in an SEC filing.
With a mere $121 million in accessible cash and a ballooning accounts payable of $182 million, Fisker is casting doubt about its ongoing operations. Despite these challenges, Fisker is actively seeking a lifeline. Negotiations are underway with a major automaker, rumored to be Nissan, for a potential investment and partnership. Additionally, the company is attempting to raise $150 million through convertible note sales.
“We continue to seek and evaluate opportunities to raise additional funds through the issuance of our securities, through an arrangement with a potential strategic partner, and from the sale of vehicles. If capital is not available to us when, and in the amounts needed, we could be required to further curtail our operations,” the company added; that further suggested that it could need to seek protection under the applicable bankruptcy laws. Adding to the grim situation, Fisker said it could not provide any assurance about its ability to raise the capital required to continue operations.
Meanwhile, the news comes amid the ongoing investigations by the National Highway Traffic Safety Administration into the potential rollaway problems and braking system malfunctions in the Fisker Ocean SUV. Not just the regulators, but these issues, coupled with the software glitches, have eroded even consumer confidence in the Fisker brand.
While Fisker’s future hinges on its ability to secure funding, address safety concerns, and regain consumer trust, the path to recovery appears steep. The late filing of annual results and missed debt payments further complicate the company’s financial picture.
