Electric carmaker Fisker files for US bankruptcy protection
The electric car company Fisker has filed for US bankruptcy protection, making it the latest EV startup to collapse trying to challenge the established car industry.
The company was started in 2016 by the husband-and-wife team Henrik Fisker and Geeta Gupta-Fisker. It is the second attempt by Fisker, a former Aston Martin design chief, to establish an EV challenger that has ended in bankruptcy.
Alongside focusing on green manufacturing methods, Fisker also used an unusual “asset-light” production model. This relied on contract manufacturers to assemble its cars, avoiding the huge investments required to build factories.
The company blamed supplier delays for missed production targets and struggled to hit ambitious sales forecasts after complaints of mechanical issues with the few thousand cars it sold.
Fisker had said it was in negotiations with an unnamed large automaker over a possible investment in the company, joint development of the technology underlying electric cars, and manufacturing in North America. However, those talks came to nothing, and it was forced to halt manufacturing its Ocean SUV in March.
The prospect of a switch from petrol and diesel to electric cars – alongside Elon Musk’s success with Tesla – has prompted a host of entrepreneurs to challenge incumbents. However, many of them have failed after spending billions in investor cash that had been raised in a bubble during the coronavirus turmoil.
EV startups have faced a number of headwinds. Rising interest rates have made it much harder for loss-making companies to find funding, and has weighed on demand for electric cars that remain more expensive than petrol or diesel equivalents, even if total running costs are lower on average.
Increasing competition in the electric vehicle space – particularly from China – has also put pressure on manufacturers to cut prices, making profitability harder.
US failures include Lordstown Motors, which was once feted by Donald Trump as the saviour of the Ohio town from which it took its name, and Proterra, a bus and battery company. Both collapsed in 2023.
Proterra’s collapse took down one of its British customers, Volta Trucks, which has since tried to restart with new funding. Another British electric vehicle champion, Arrival – which was valued at $15bn after a splashy New York listing in 2021 – collapsed in February.
Although BYD is Tesla’s biggest electric car rival, Chinese manufacturers have not been immune to challenges in the market. WM Motor filed for bankruptcy in October, while Nio had to be bailed out by local government.
Fisker blamed wider economic conditions for its woes. It said in a statement: “Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently. 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.”
The US Chapter 11 process applies to the company’s operating subsidiary, giving it protection from creditors while it tries to negotiate further.