Fisker Files for Bankruptcy as Negotiations With Major Carmaker Come to Close

By Trisha Andrada

Jun 18, 2024 03:21 AM EDT

Fisker
A logo sits illuminated outside the Fisker booth at the SK telecom booth on day 1 of the GSMA Mobile World Congress on February 28, 2022 in Barcelona, Spain. (Photo : David Ramos / Getty Images)

Fisker, an American electric vehicle manufacturer, filed for bankruptcy protection late on Monday, June 17, after deal discussions with a global carmaker faltered.

Fisker Files for Chapter 11 Bankruptcy

The Fisker Group Inc. division declared Chapter 11 bankruptcy in the District of Delaware. In a news release, it stated: "After evaluating all options for our business, we determined that proceeding with a sale of our assets under Chapter 11 is the most viable path forward for the company."

According to a Reuters report, it valued its assets at $500 million to $1 billion and its liabilities at $100 million to $500 million. The court statement states that Fisker estimates there are 200 and 999 creditors.

After negotiations with a major carmaker ended in March, Fisker began exploring strategic alternatives, including in- or out-of-court restructurings and capital markets transactions.

Although Fisker has remained tight-lipped about the particular firm, Reuters said that Nissan was in advanced discussions about investing in the startup.

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Fisker Voices Concerns About Viability

Fisker has already raised warning flags early this year about its viability and put a hold on funding for further projects unless it found an auto alliance.

Amid sales problems for its Ocean EVs, Fisker announced a reduction in staff.

Adding insult to injury, the US auto safety agency launched a preliminary inquiry on several 2023 Fisker Ocean EVs last month. The company was already under scrutiny from the National Highway Traffic Safety Administration (NHTSA) for three previous accidents involving these vehicles.

The company's financial reserves were reduced due to the difficulty in obtaining financing in an economy with high interest rates, the expenses incurred in marketing and distributing the cars, and worse-than-expected demand for EVs.

READ MORE: Stellantis CEO Carlos Tavares Criticizes Own Arrogance in Dealing with US Plant Issues

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