The fall of electric vehicle startup Fisker: a complete timeline

At the time, Henrik Fisker conceived a thriving electric vehicle empire in his eponymous company, which would be headed by the all-terrain Ocean. However, that vision began to crumble almost immediately once the Ocean was launched on the market in 2023.

Fisker has repeatedly lowered its production goals, failed to meet its sales targets, and has proceeded with staff reductions. Its Ocean sport utility vehicle (SUV) had a number of both mechanical and software issues, resulting in its inoperability for certain users. Issues that led to various safety investigations and ultimately a halt to production to obtain additional funding included brake problems, sudden loss of power, and difficulties opening doors.

The Fisker company has been forced to declare bankruptcy under Chapter 11 of the Bankruptcy Law, which indicates the beginning of an unfavorable stage for this emerging company. Below is a sequence of events that led to this financial situation.

In the second quarter of 2023, Fisker failed to meet its production goal.

In the second quarter of 2023, the automaker produced 1.022 Ocean SUVs, which was below its initial projection of making between 1.400 and 1.700 electric vehicles.

Fisker issued convertible bonds in order to obtain financing for its operations.

On July 10, Fisker announced plans to issue $340 million in convertible debt, with the expectation of net proceeds totaling $296,7 million. The automaker indicated that it intended to use the funds to support its overall corporate operations, as well as the addition of a new line of battery packs to support its growth beginning in 2024. Additionally, the company He noted that the resources would also go toward capital expenditures and future product development.

Reduction of the production goal.

In an effort to free up $300 million in working capital, Fisker reduced its annual production forecast. The company said it planned to manufacture around 10.000 vehicles in 2023, which is only a quarter of its optimistic forecast from the previous year.

In the year 2024, the Fisker company faced challenges in meeting its national sales goals.

Electric vehicle startup Fisker failed to meet its public goal of delivering 300 electric SUVs daily globally. During the month of December, the company worked to achieve an internal sales goal of between 100 and 200 vehicles per day in North America, the region where the majority of its inventory and sales strategies are concentrated. However, Fisker failed to achieve that goal, often selling only one or two dozen of its Ocean SUVs daily in this area.

Investigation into the Ocean off-road vehicle over complaints related to brake system performance.

On January 15, federal safety regulators launched an investigation into the first electric car manufactured by the Fisker company due to problems related to the braking system. A total of 19 complaints were filed by owners with the National Highway Traffic Safety Administration (NHTSA). These complaints addressed a variety of issues, including everything from loss of braking ability, difficulties with the shift lever, a failure to open the driver's door from the inside, and two incidents in which the vehicle's hood became loose. opened unexpectedly while traveling on the road.

For several months, owners had reported sudden decreases in power and difficulties with the braking system.

Since delivery of the initial fleet of Fisker Ocean SUVs, more than 100 incidents of power loss have been reported by customers. The company has stated that it considers these problems to be rare and has fixed most of them through software updates. Among the difficulties reported by customers are the sudden loss of braking power, problems with access devices that cause locks inside or outside the vehicle, failure of the seat sensors to detect the driver and the unexpected opening of the front hood of the SUV at high speeds.

After receiving reports of overturning, federal authorities have launched a second investigation into the Ocean off-road vehicle.

On February 16, the National Highway Traffic Safety Administration (NHTSA) began a second investigation into Fisker's Ocean off-road vehicle after receiving four complaints that the car had started moving. unexpectedly, causing injury. Given this situation, the company reported that it is fully collaborating with the security agency.

Fisker has laid off 15% of its workforce.

On February 29, the Fisker company announced its intention to reduce its workforce by 15% and expressed concern about insufficient funds to remain operational in the coming year. The company is exploring alternatives to obtain financing while implementing a change in its business model, moving away from direct sales through dealers.

Production was stopped with a balance of $121 million in reserve.

On March 18, the Fisker company announced its decision to temporarily stop manufacturing its Ocean electric off-road vehicle for a period of six weeks, with the aim of obtaining additional financing. According to a regulatory filing, the company had $121 million in cash and cash equivalents as of March 15, of which $32 million was restricted or not immediately available. In addition, Fisker reported that it had debts totaling $182 million and expressed concern about its ability to continue operations without obtaining new funds.

The deal between Fisker and Nissan fell apart, resulting in the potential loss of bailout funds.

On March 25, negotiations between Fisker and a major automaker, possibly Nissan, regarding potential investment and collaboration were finalized, threatening a near-term bailout financing plan. In a regulatory filing, Fisker said the automaker had ended negotiations on March 22, without providing an explanation. However, the company was forced to continue negotiations as part of the conditions to close a possible $150 million convertible bond.

Trading on the New York Stock Exchange has been suspended.

On March 25, the New York Stock Exchange suspended trading in Fisker's shares and determined its exclusion from the exchange because it no longer met the requirements for listing, mainly due to unusually low price levels.

For months, Fisker experienced difficulty tracking millions of dollars in customer payments.

During the surge in deliveries, Fisker experienced a temporary loss of millions of dollars in customer payments, prompting an internal audit that began in December and spanned several months. According to three sources familiar with the situation, the company faced difficulties in supervising these transactions, which ranged from initial payments to the total amount of the vehicles, due to the lack of rigor in internal registration procedures. Cases were reported in which vehicles were delivered without having received any payment.

New series of layoffs to preserve financial resources.

On April 29, the Fisker company laid off several employees in order to preserve liquidity, in line with a previously announced plan, according to an internal email. According to a regulatory filing from the U.S. Securities and Exchange Commission, Fisker intends to file for bankruptcy protection within the next 30 days if it is unable to obtain the necessary funds.

An engineering company was defrauded by Fisker.

On May 3, Fisker stopped payments to the engineering company that helped develop the Pear, an affordable electric car aimed at the general public, and the Alaska, Fisker's foray into the pickup truck market, the which is experiencing notable growth. In addition, the engineering company accuses Fisker of improperly retaining intellectual property related to said vehicles.

Fisker Ocean subject to fourth safety investigation by federal authorities.

On May 10, the National Highway Traffic Safety Administration (NHTSA) launched a new investigation into the Fisker Ocean off-road vehicle. This investigation aims to examine various complaints related to the involuntary activation of the automatic emergency braking system. Eight complaints have been filed, all alleging that owners have experienced the sudden activation of this system in situations where there were no other vehicles or obstacles in the path of their cars.

To keep the startup operational, they have been forced to lay off hundreds of workers.

During the last week of May, in an effort to ensure its survival, the automaker laid off hundreds of additional employees. The company continues to search for financing, a buyer or is preparing for possible bankruptcy. According to estimates from one current employee and another who was fired, it is estimated that the company's current workforce is reduced to approximately 150 people.

In the decline of Fisker Automotive, there are a number of factors that contributed to its failure.

The path to Fisker's ultimate ruin, possibly, began and ended with its Ocean all-terrain vehicle, which presented numerous mechanical and software problems. This process was marked by arrogance, power conflicts and the recurring inability to establish fundamental processes for any automotive company.

The Ocean SUV receives the first recall.

On June 12, Fisker issued the first recall notice for the Ocean off-road vehicle due to warning light issues, according to a recent report released by the National Highway Traffic Safety Administration (NHTSA). The instrument panel has been observed to display the brake, parking, and anti-lock system warning lights in an incorrect font size and sometimes in an inappropriate color, resulting in noncompliance with Federal Truck Safety Standards. Motor vehicles. The agency has also noted that "several warning lights do not activate during the ignition cycle."

Fisker has filed for bankruptcy.

On June 18, after a year of financial difficulties, Fisker filed for Chapter 11 bankruptcy protection. Based in California, the company had been negotiating with another automaker in a final attempt to save itself. According to the report filed, Fisker estimated its assets at between $500 million and $1.000 billion, and its liabilities at between $100 million and $500 million.

Fisker failed due to its lack of preparation in the automotive sector.

On June 18, after filing for bankruptcy, Fisker announced that it will maintain "reduced operations," with the goal of preserving customer programs and compensating essential suppliers in the future. This would involve managing a basic operation in case a buyer appears interested in acquiring the assets that the company is offering for sale during the Chapter 11 process.

In August 2023, the Fisker company experienced financial difficulties.

According to a new filing in its Chapter 11 bankruptcy proceedings, Fisker was already facing “possible financial difficulties” in August 2023. This looming financial situation led the company to seek a partnership or investment with another automaker, such as as mentioned in the presentation.

The dispute over the assets of the Fisker company is intensifying.

The dispute over the Fisker company's assets has begun quickly after its bankruptcy filing, according to an attorney who points out that the company has been liquidating assets without court oversight. At the center of the controversy is the relationship between Fisker and its main secured lender, who gave the company more than $500 million in 2023, at a time when the company's financial crisis loomed in the background.

Fisker is asking the bankruptcy court for permission to market electric cars at a price of approximately $14.000 each.

Should a Delaware Bankruptcy Court judge approve Fisker's request to transfer its remaining inventory to a New York-based auto leasing company, the automaker would be able to part with 3.231 complete electric vehicles for a total of 46,25 million dollars, which is equivalent to approximately 14.000 dollars per unit.

Henrik Fisker and Geeta Gupta-Fisker have decided to reduce their salaries to one dollar.

Businessman Henrik Fisker and his wife, Geeta Gupta-Fisker, co-founder of the company Fisker, have decided to reduce their salaries to $1 as part of the measures taken to manage the bankruptcy process of their electric vehicle company. In a presentation Tuesday, Fisker restructuring officer John DiDonato said that in addition to salary reductions, the company will postpone certain severance payments, employee health benefits and vehicle sales bonuses that have not yet been paid. .

[ad_1]