California-Based EV Maker Fisker Cruising Toward Bankruptcy

A view of the solar car top of the Fisker Ocean during the 2021 LA Auto Show in Los Angeles on Nov. 17, 2021. (Mike Blake/Reuters)

California-based electric vehicle maker Fisker is running out of money and could file for bankruptcy in June.

The company, based in Manhattan Beach, Calif., defaulted on a loan after failing to make a $8.4 million interest payment last month, according to Fisker’s year-end report to the Securities and Exchange Commission (SEC) filed April 23.

“We have concluded there is substantial doubt as to our ability to continue as a going concern,” the company wrote in a filing with the SEC .

If Fisker can’t get relief from its debt holders and sufficient funds to pay its debt, it expects to file for bankruptcy by mid-June, the company reported.

The EV start-up, co-founded by Danish automotive designer Henrik Fisker, was once valued at $2.9 billion, but its bank accounts have dwindled.

Fisker spent about $900 million in cash on operations and investments last year, reducing its cash balance to about $326 million. The cash balance was further reduced to about $54 million by April 16, Fisker reported.

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Fisker said it hopes to raise more debt or equity financing, either by partnering with other manufactures or selling vehicles.

The company has delivered over 6,400 Oceans, its first all-electric model that has won several awards for its design.

The Ocean targets the large and rapidly expanding premium EV market for luxury sports utility vehicles (SUVs). Other vehicles sharing the space are Tesla Model 3 and BMW X3 Series.

Fisker’s model is a five-passenger vehicle with a range of 231 to 360 miles, depending on the customer’s selection of battery pack, driving conditions, wheel size, and testing procedures, according to the company.

The company drastically reduced the price of its 2023 Ocean models on March 27, slashing its 2023 Ocean Extreme model by $30,000 to a sale price of $37,499. The Ultra trim was reduced by $18,000 to $34,999 and its Sports trims were on sale at $24,999, a discount of $14,000.

Some models are equipped with as much as $7,000 in additional options.

The company continues to look for dealer partners in North America and Europe as it transitions to a dealer partner model, it reported last month.

Mr. Fisker, who founded the company with his wife in 2016, serves as the company’s chairman of the board and CEO. He created the Fisker Karma, the world’s first luxury plug-in hybrid, which launched in 2011. The vehicle had a full-length solar roof, vegan interior, and adjustable braking.

In the past, Mr. Fisker led the development of the BMW Z8 sports car and the Aston Martin DB9/V8 Vantage.

Rival EV carmaker Tesla’s CEO Elon Musk sued Mr. Fisker in 2008 for breach of contract. Mr. Fisker was brought in to help Tesla style its Model S and was accused of doing reconnaissance before launching his own company.