US EV maker and Tesla rival file for bankruptcy, plan to sell up after failed deal

AN innovative electric vehicle maker has declared bankruptcy after a series of potential deals with major manufacturers fell through.

Fisker, the company behind the popular Ocean EV SUV, has declared bankruptcy after weeks of shutting down operations and slashing prices.

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The EV company was one of the most watched brands in the electric transportation revolution.

But the company filed for bankruptcy in Deleware after spending more than $1 billion to scale production.

Fisker did not immediately respond to US Sun’s request for comment.

In March, Fisker announced it was in talks to secure investment from a “major automotive brand” that many believed to be Nissan.

But negotiations to secure financing were unsuccessful.

The company intends to sell assets and reorganize part of its debt, according to Reuters.

Fisker tried to follow a similar playbook to Tesla, offering a well-designed electric car with dozens of unique features.

The company was the brainchild of legendary car designer Henrik Fisker. He rose to stardom after designing the Aston Martin DB9, the vehicle used in the James Bond films.

The Ocean SUV, the first car offered by the brand, is a stylish five-passenger EV with 360 miles of range.

The car starts at US$40,000, well below the average price of a new electric car.

The Ocean is capable of using “California Mode,” a feature that opens all windows except the windshield, and has been well received by car design enthusiasts.

It also features a “Taco Tray” table extension for eating in the driver’s seat.

The brand began selling its Ocean SUV in May 2023, before a series of negative headlines began to sink the company.

Ocean drivers complained about dozens of quality issues as the startup began ramping up production.

Famously, YouTuber Marques Brownlee called the Ocean “the worst car I’ve ever reviewed” in a video.

Fisker’s problems

Fisker endured six months of headlines – here’s what happened to the company:

Fisker was one of the most watched EV brands before its consumer launch.

But once the brand hit the open market, dozens of financial difficulties and complaints about the quality of the vehicles contributed to the company’s eventual bankruptcy filing.

Financially, Fisker delayed several SEC filings.

The company also struggled to maintain investments after spending $1 billion in money from individual investors.

Fisker was delisted from the New York Stock Exchange in April 2024 after its shares fell “abnormally downward.”

Its consumer-facing product also faced difficulties after hitting the market.

The Ocean was built in Europe before being shipped to customers in the US.

Customers have complained about months-long waiting periods before receiving their vehicles.

So, several buyers said they had concerns about quality.

Famously, Marques Brownlee called the Ocean “the worst car I’ve ever reviewed,” citing several technical flaws.

The company said Brownlee tested a car before receiving technical updates.

Fisker complained that Brownlee drove the car before an over-the-air update fixed dozens of technical flaws found in the analysis.

But the video was the most-watched review ahead of a series of reports on quality issues from dozens of other publications.

Several reports complained of issues with keys, delivery communication issues and lack of control.

Hill-hold is a feature in cars that automatically keeps the vehicle stationary on an incline, preventing it from rolling backwards when the driver switches from the brake to the accelerator.

The National Highway Traffic Safety Administration has opened an investigation into the brand’s braking problems.

Fisker said it resolved the previous braking issues with a software update and was cooperating fully with the investigation.

RATE CHANGE

Fisker joins a group of large electric vehicle startups that have recently filed for bankruptcy.

“Like other companies in the electric vehicle industry, we have faced several macroeconomic and market obstacles that have impacted our ability to operate efficiently,” the company said in a statement.

Last year, three EV brands – Lordstown, IndiEV and WM Motors – declared bankruptcy.

Lordstown emerged from bankruptcy as Nu Ride Inc.

But dozens of electrified brands have struggled to turn millions of dollars in initial investments into profitable businesses.

Brands have made huge short-term investments in factory production and research and development processes.

But consumer interest in EVs has grown at a slower rate than initially expected.

All-electric startup brands are also competing with growing competition from companies like Ford, GM and Hyundai, which continue to build new electrified vehicles.

Legendary brands had an advantage in attracting cheaper capital due to their higher credit scores and their track record as profitable companies.