EV startup Fisker files for bankruptcy

LOS ANGELES: US electric vehicle (EV) maker Fisker filed for bankruptcy protection late on Monday as deal talks with a big automaker collapsed, exposing the startup to the fallout of a rapid cash burn to deliver its Ocean SUV in the United States and Europe.

The company's unit, Fisker Group Inc, filed for Chapter 11 bankruptcy in Delaware, listing estimated assets of US$500 million to US$1 billion and liabilities between US$100 million and US$500 million.

Fisker's estimated number of creditors are 200-999, according to the court filing.

The termination of talks in March with a large automaker led Fisker to search for strategic options, including in- or out-of-court restructurings and capital markets transactions.

While Fisker has not named the company, Reuters had reported that Japanese automaker Nissan was in advanced talks to invest in the startup.

The US company, founded by automotive designer Henrik Fisker, flagged doubts about its ability to remain in business in February and had paused investments in future projects until it secured an auto partnership.

Fisker also said it would cut its workforce by about 15% amid struggles to sell its Ocean EVs.

It made over 10,000 vehicles in 2023 - less than a quarter of its initial forecast - and delivered only about 4,700.

Last month, the US auto safety regulator opened a preliminary probe into some Ocean EVs made by Fisker in 2023, adding to the firm's woes as the cars were already under investigation by the National Highway Traffic Safety Administration (NHTSA) for three prior incidents.

Tight access to capital in a high interest rate economy, costs associated with marketing and distributing its vehicles and slower-than-expected EV demand dragged the company's cash reserves lower.

Depleting cash reserves, fundraising hurdles and challenges in ramping up production caused by global supply chain issues led to companies such as Proterra, Lordstown and Electric Last Mile Solutions declaring bankruptcy.
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