Fisker Inc. once compared itself to Apple.
CEO Henrik Fisker wanted his EV startup, which was just thrown off the New York Stock Exchange, to be different from others. Similar to Apple’s new approach of outsourcing the assembly of its gadgets to Foxconn, Henrik Fisker wanted to do the same with Austrian manufacturer Magna Steyr. And he did.
But now none of that matters, because Fisker faces a completely different challenge: possible bankruptcy.
What went wrong with the Danish car designer’s company of the same name?
Launch and early years
California-based Fisker launched in 2016, after the founder’s former startup called Fisker Automotive went bankrupt a few years earlier.
Fisker said at the time that he hoped to invest in new technology that would help his company develop quickly while making affordable all-electric SUVs. A challenger to market leading Tesla, if all went well.
In the meantime, as the EV craze began to catch fire, Fisker managed to pique the interest of investors looking for a foray into the space. While Fisker had excellent design expertise, he also had a complicated history considering his first failed startup. But his new company looked promising in the jumble of EV and EV-adjacent companies that rushed to get a piece of the action in the late 2010s.
In 2020, the company went public through a Special Purpose Acquisition Company (or SPAC) on the New York Stock Exchange. At the time, the company forecast revenue of $13 billion by 2025 (this was before 2020 revenue).
Bringing Fisker’s concept to market was the next test. A slew of software, supply chain and regulatory issues meant that the company’s first model, the Fisker Ocean, only started delivering cars a year ago.
Some of Fisker’s problems apply to the entire EV industry as demand declines, price competition increases and investor interest wanes. Several EV industry players have folded due to these headwinds, including Arrival and Lordstown. But Fisker’s strategic decisions – including moving to a dealer network from a direct-to-consumer model – have only made matters more complicated to solve given the current EV climate.
Joan Cros – NurPhoto/Getty Images
Trouble in paradise
Fisker’s laundry list of problems has only increased since the beginning of this year.
The company has become the subject of an investigation after users complained that their Fisker cars were rolling away. The Ocean SUVs are now under investigation by US federal regulators for brake-related issues.
It is also in serious financial trouble. In its annual results last month, the Tesla rival made almost 10,200 electric vehicles, but delivered only 4,900. Fisker also said at the time that it was dangerously tight and hoped to receive an investment from “a major automaker.”
It laid off 15% of its staff as it planned to change its strategy due to liquidity problems. Not least, it raised “substantial doubt” about its ability to continue as a going concern.
Fisker received a warning from NYSE due to its low share value in February. On Monday, within a month of the previous notice, the company was delisted from the world’s largest stock exchange.
The cocktail of problems has brought the ambitious EV company closer to bankruptcy than ever before.
Is this the last stage?
Earlier this month, Fisker said it would suspend production for six weeks as it missed an interest payment and would seek to raise $150 million by selling convertible bonds. The long-awaited talks with that unnamed ‘major car manufacturer’ about a possible investment failed this week.
The last beacon of hope for California-based Fisker was Nissan, the Japanese auto giant, which pulled out at the last minute, according to Reuters.
Fisker’s future has never felt more uncertain, and whether the company can pull itself out of the crisis during the ongoing EV winter remains to be seen.
But Henrik Fisker has remained optimistic throughout. He told Yahoo Finance this month that he believes “we have a future, otherwise I wouldn’t be here.”
“And I believe we will manage to get out of this, I would say, general EV crisis,” he said.
Fisker could do something with that optimism.