Fisker is preparing for a possible bankruptcy filing, according to a new report from The Wall Street Journal. The news comes after Fisker told investors about its "substantial doubt" that it could meet all of its financial obligations without a cash infusion.
[Update 3/15 at 11:27 a.m. EST: This story has been updated with a new statement from Fisker.]
The troubled EV startup founded by Henrik Fisker has hired bankruptcy advisors to assist in a potential filing, according to the WSJ. The company has produced—err, its supplier Magna has produced—around 10,000 of its Ocean electric crossovers. It has sold around half of them. The product launched at a time of slackening demand for EVs last summer, and has faced high-profile issues, a regulatory probe over braking issues and a scorching review from one of the world's biggest tech reviewers. The company had to cut back production in December in the face of weak demand and a sales model that wasn't working out. The WSJ reports that Fisker wants to switch to a dealer model from a direct-sales approach, but it's unclear if it'll make it long enough to pull that off.
Fisker issued a statement in response to reports about its alleged retention of bankruptcy advisors. "As a matter of company policy, Fisker does not comment on market rumors and speculation," the statement said. "However, Fisker often works with outside advisors to help manage its business and assist in developing and executing strategies. does not comment on market rumors and speculation. Fisker is focused on raising additional capital and engaging in a strategic partnership with a large automaker. The company is also continuing to pursue its shift to a Dealer Partnership model in both North America and Europe. The leadership team is laser-focused on these efforts."
The company has a billion dollars of debt as of its last filing, meaning it will take a lot of Ocean sales to dig out of the hole. It's no wonder the company is pursuing a partnership with a larger automaker. Rumors suggest Nissan could be interested, but we're not sure what the company would get out of a deal with Fisker. Its partner Magna, the contract production company that builds the Ocean along with other products for legacy OEMs like Mercedes, lists business with Fisker as one of its financial risks.
The company's share price has fallen over 97% since its initial public offering, as the WSJ points out. It has no new product close to production, and even ignoring the bugs most reviewers haven't found the Ocean to be particularly compelling. And because its manufacturing is contracted out to Magna in Austria, it has no U.S. production facility to serve as a key asset or to produce cars that qualify for the federal tax credit. The company is in stormy waters and, if this report from the WSJ is correct, it seems to be preparing the lifeboats.
