Fisker on the Brink of Bankruptcy
Fisker Scrambles to Raise Cash Amidst Financial Woes
Less than two months after cutting 15% of its workforce, electric vehicle startup Fisker is planning further layoffs as it struggles to raise cash and avoid bankruptcy. According to a U.S. Securities and Exchange Commission (SEC) regulatory filing, Fisker expects to seek Chapter 11 bankruptcy protection within the next 30 days if it fails to secure the necessary funds.
Financial Struggles
Fisker’s financial woes are well-documented. The company currently has just $54 million in cash and equivalents as of April 16, with another $11.2 million that cannot be immediately accessed. This is a stark contrast to its outstanding loan balance of over $300 million, which Fisker defaulted on earlier this year.
Layoffs and Restructuring
Fisker’s workforce has been significantly reduced in recent months. As of April 19, the company employed 1,135 people globally, down from 1,560 at the end of 2022 and around 1,300 at the end of September 2023. The company has also announced plans to reduce its physical footprint.
Boardroom Departures
Fisker’s troubles are not limited to its financials. The company has experienced a series of high-profile departures from its board of directors, including a second member who left the company this week. This follows the departure of another board member at the end of March.
Fisker Ocean Troubles
Fisker’s launch of its first electric vehicle, the Fisker Ocean SUV, has been marred by numerous problems. The vehicle has been plagued by software issues, reports of sudden power loss and brake failure, and insufficient customer service. These issues have led to three separate federal investigations by the National Highway Traffic Safety Administration (NHTSA).
Production Halted
Fisker has paused production of the Ocean SUV in an effort to address these issues. The company has also slashed prices on its existing inventory by as much as 39% in a bid to generate short-term cash.
Delisting from NYSE
In addition to its financial struggles, Fisker has been delisted from the New York Stock Exchange (NYSE). This is a significant blow to the company’s efforts to raise capital and restore investor confidence.
Founder’s Previous Experience
Fisker’s founder, Henrik Fisker, has experience with bankruptcy. His previous automotive startup, Fisker Automotive, filed for Chapter 11 bankruptcy protection in 2013.
Related Topics
- Electric vehicles (EVs)
- Startups
- Transportation
Author Bio
Sean O’Kane is a Sr. Reporter, Transportation at TechCrunch. He has spent over a decade covering the rapidly-evolving business and technology of the transportation industry, including Tesla and the many startups chasing Elon Musk.
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