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Fisker Ocean electric SUV vehicles at one of the company’s dealers in California, the US. Picture: REUTERS
Fisker Ocean electric SUV vehicles at one of the company’s dealers in California, the US. Picture: REUTERS

US electric vehicle (EV) maker Fisker filed for bankruptcy protection late on Monday as deal talks with a big carmaker collapsed, exposing the start-up to the fallout of a rapid cash burn to deliver its Ocean SUV in the US and Europe.

The company’s unit, Fisker Group, filed for Chapter 11 bankruptcy in Delaware, listing estimated assets of $500m-$1bn and liabilities between $100m and $500m. Fisker’s estimated number of creditors are 200-999, according to the court filing.

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

While Fisker has not named the company, Reuters had reported that Japanese carmaker Nissan was in advanced talks to invest in the start-up.

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 manufactured more than 10,000 vehicles in 2023 — less than a quarter of its initial forecast — and delivered only about 4,700.

In May, 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 previous 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.

Reuters

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