It’s curtains: Fisker files for Chapter 11 bankruptcy

The writing on the wall said that a miracle was needed to save Danish designer Henrik Fisker’s American-based electric car start-up. According to Reuters, talks on new investments with a non-disclosed ‘major car manufacturer’ finally failed, and Fisker Group officially filed for Chapter 11 bankruptcy in Delaware on June 17.

Things had been looking bleak for Fisker for quite a while, but in late April, CEO Henrik Fisker said four companies were still interested in saving the ailing automaker. Several sources mentioned Nissan as one of them, being primarily interested in investing $400 million in Fisker’s Alaska pickup but backing out of the deal.

Assets up to $1 billion

Reuters reports that Fisker’s assets are listed between $500 million and $1 billion and liabilities between $100 million and $500 million. “According to the court filing, Fisker’s estimated number of creditors is 200-999.”

Fisker does not have its own production facilities and wanted to be a lean design and development company. The Ocean was built at Magna in Graz (Austria), while Fisker also partnered with contract manufacturer Foxconn for the announced Pear small car. However, future models like the Pear and the Alaska e-pickup were put in the fridge.

Bad omen

The bad omen became apparent in May when Magna Steyr CEO Swami Kotagiri revealed that Magna had to adjust its outlook for 2024 after “assuming no additional Fisker Ocean production and lower sales on program delays and mix”.

Contract builder Magna in Austria was building the Fisker Ocean SUV alongside the BMW 5-series, BMW Z4, and Toyota Supra models (which share a platform), the Jaguar E-Pace and I-Pace, and the combustion-powered Mercedes G-Class.

Kotagiri, quoted by Yahoo Finance, added, “The (Ocean) vehicle’s production is currently idled. Our current outlook assumes no further production. Consistent with disclosure we provided in our annual information form, this assumption reduces our 2024 sales by about $400 million and impacts our adjusted EBIT margin by about 25 basis points.”

Magna Steyr said it will lay off 500 employees at its contract manufacturing operation in Graz, Austria, as production of key models, including the Fisker Ocean electric SUV, BMW 5 Series, and Jaguar E-Pace and I-Pace, is halted or comes to an end this year.

11,000 Oceans built

At the end of 2023, Fisker announced that over 10,000 Oceans had been built, and a little under half had been delivered. By March 15, Fisker reported that another 1,000 had been manufactured, but the company had a stockpile of about 4,700 vehicles, most of which were built the year before.

In what was seen as an ultimate effort to stay alive, Fisker cut Ocean prices in March of this year, drastically lowering the price by $24,000 and making the most affordable cost $24,999 in the States.

However, after the price drop, its six-strong US dealer network only delivered about 200 units. The company also has 12 partner dealers in Europe, but it is unclear how many Oceans it has put on the market.

Fisker cut Ocean prices by as much as it did, leaving owners who paid the original full price feeling cheated, seriously affecting the company’s image and credibility. The New York Stock Exchange even de-listed Fisker stock after its shares had reached an “abnormally low” price.