https://carbuzz.com/beset-by-problems-fisker-files-for-bankruptcy/
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KEY TAKEAWAYS
- Fisker files for bankruptcy after rescue talks with unnamed automaker collapse.
- Court filings show the company has between 200 and 999 creditors.
- Liabilities are estimated to be between $100 million and $500 million.
Electric vehicle maker Fisker has filed for bankruptcy protection, reports Reuters. Now that talks with an unnamed automaker have fallen through, the company faces the risk of burning through its cash reserves. Fisker Group Inc. filed for Chapter 11 bankruptcy, listing assets between $500 million and $1 billion while liabilities are between $100 million and $500 million.
The court filing shows that the company has between 200 and 999 creditors. CarBuzz has reached out to Fisker for additional information on the matter. Earlier this year, Nissan was in talks with Fisker to invest approximately $400 million in developing an electric pickup truck, likely the Alaska. Nothing came of this, however, and Fisker has been struggling to stay afloat.
The Problems Are Piling Up For Fisker
Aside from a slew of quality issues plaguing the new Ocean, the automaker has faced myriad financial woes. In March, Fisker paused production for six weeks in an attempt to balance out its growing inventory. Just a month later, several automakers expressed interest in purchasing the automaker outright, but nothing came of this.
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Production of the only vehicle Fisker managed to sell then ground to a halt, and last month, Magna CEO Swami Kotagiri said that idled Ocean production was not expected to restart. The company initially planned to build 120,000 vehicles a year. However, with the current outlook not looking so great, Fisker has discounted its cars considerably, with the base trims now retailing for less than $25,000.
The Future Isn't Looking Good For Fisker
These low prices are moving inventory, but there's a risk that these vehicles could essentially be 'bricked' if the company fails, making these bargain buys a great risk. Despite these risks, an overwhelming number of consumers have said they would take the plunge, though it's still highly unlikely that Fisker's planned follow-up models - the Pear, Alaska, and Ronin - will ever come to fruition.
RELATED Here's what we think will happen to the models Fisker had in its pipeline.
CarBuzz recently spoke to several former Fisker employees to understand what was happening behind the scenes at the troubled automaker. Several individuals claimed that top management refused to listen to advice and made hasty decisions. "The actions taken by senior leadership were full of 'I'm going to do whatever I want regardless of what you guys think is right,'" said one former employee. "If Henrik wanted a press release or marketing campaign started even when multiple teams said it was a terrible idea, then it was launched," they added. With experiences like this, it is no surprise that Fisker has had to resort to bankruptcy.