Fisker, a start-up company that aimed to replicate Tesla’s success, filed for bankruptcy just a year after releasing its first electric vehicle model. This marked the second time that a project by car designer Henrik Fisker ended in failure. The company, founded in California seven years ago, struggled with the complexities of running a public company after outsourcing production in an attempt to enter the auto industry more affordably and quickly.
Fisker is part of a group of prominent electric vehicle start-ups that have faced financial difficulties in their attempts to revolutionize the traditional car industry. Companies like Lordstown Motors and Arrival have also filed for creditor protection, while others are cutting costs or canceling investments to preserve cash reserves. Fisker, in particular, faced declining demand for electric vehicles just as it began delivering its first model, the Ocean SUV, last summer.
Despite raising over $1 billion from investors, Fisker burned through almost all its cash reserves and failed to reach a deal with a major car manufacturer for investment and joint production. The company’s shift from direct sales to sales through agencies did not improve sales, and it was left with unsold vehicles. Critics panned the Ocean SUV for software-related issues, and the National Highway Traffic Safety Administration investigated reports of braking problems.
Fisker’s first foray into the automotive sector, the Fisker Karma, also ended in bankruptcy shortly after its launch due to quality problems and financial issues. The company struggled with production delays and shipping vehicles from Europe to the U.S. for sales. Despite producing thousands of Ocean vehicles in 2023, Fisker delivered only a fraction to customers, leading to financial woes and lay-offs.
As Fisker’s cash reserves dwindled and efforts to raise money failed
