A sad, but predictable, end: Fisker files for bankruptcy

Electric vehicle startup Fisker has officially filed for bankruptcy, several months after warning investors it lacked the cash to make it through the year.

Fisker now plans to sell its assets, estimated to be worth between $500 million and $1 billion, following the typical Chapter 11 process.

In a statement, the company acknowledged it had "faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently," comparing its struggles to those of other EV brands. "After evaluating all options for our business, we determined that proceeding with a sale of our assets under Chapter 11 is the most viable path forward for the company."

How did we get here?

• Fisker Inc. was founded in 2016 by renowned car designer Henrik Fisker (who headed efforts to develop the BMW Z8), representing his second attempt to launch an EV company after his previous venture, Fisker Automotive, filed for bankruptcy in 2013.

• In February 2024, Fisker revealed that it would not last the year without a significant cash infusion to keep its operations running, but indicated it was working on investments deals, one of which was with a “major automaker,” to avoid a closure.

• Leading up to this point, the EV startup had been forced to delay the launch of its debut model, the Ocean SUV. It also lacked a meaningful distribution network due to its inability to ramp up direct-to-consumer sales, although it did succeed in signing several dealers to its partnership agreement.

• In the days since, Fisker’s efforts to arrange a deal with investors proved (mostly) fruitless, although it did succeed in adding a few more dealership partners. Earlier this month the company failed to make payment on a $3.5 million loan, seemingly solidifying its path to bankruptcy.

Cancellations and the MKBHD review: 

• In April, Business Insider revealed that roughly 40,000 reservations for the Fisker Ocean had been canceled, accounting for a majority of the 70,000 pre-orders made since the vehicle’s announcement in 2019.

• Roughly two months before this story broke, a review from tech-focused content creator Marques Brownlee (aka MKBHD) titled “This is the Worst Car I’ve Ever Reviewed” covering a host of software and design issues he encountered while testing the Fisker Ocean was published to YouTube, garnering nearly 6 million views. While the video’s impact is impossible to gauge, the quality issues encountered by Marques and other Ocean drivers may help explain the mass cancellations that followed.

• Marques did publish a follow-up video in April, discussing some of the fixes Fisker introduced to address the issues in his initial review, but, as the title itself suggested, the solutions were “2 Little Too Late.”

Bottom line: While not surprising, Fisker’s collapse is still disappointing. More competition in the car market, an industry dominated by a handful of powerful corporations, is always a good thing, and while the Ocean SUV had plenty of issues, it wasn’t lacking in potential either. That being said, Fisker is a stark reminder of the challenges facing EV startups in today’s landscape, and the lesson should be taken seriously by its peers in the space.

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