Fisker, an electric vehicle maker, has filed for Chapter 11 bankruptcy protection, becoming the second electric startup to do so in the past year.
The company estimated its assets to be between $500 million and $1 billion, with liabilities between $100 million and $500 million and between 200 and 999 creditors.
What they’re saying: “Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently,” Fisker said in a statement. “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.”
The backstory: Founded by designer Henrik Fisker, the seven-year-old electric car company is known for its 2022 Ocean all-electric SUV and luxury plug-in hybrid Karma, which was launched in 2011.
- This marks the second failed automotive venture led by Henrik Fisker, with the company aiming to compete with industry leaders like Tesla and big automakers in Detroit in the electric vehicle market.
Driving the news: Electric vehicle sales have slowed due to factors such as infrastructure limitations and rising inflation, making it more expensive for consumers to take on car loans.
- Electric vehicle sales grew only 3.3 percent in the first three months of the year, far below the 47 percent growth seen in the previous year, confirming automakers’ concerns about pursuing EV buyers too quickly.
- The slowdown in EV sales has led to significant price cuts and job cuts at companies like Tesla, while electric startup Rivian paused construction of its manufacturing plant in Georgia this year.
- Fisker is in advanced talks with financial stakeholders about debtor-in-possession financing and selling its assets, with the bankruptcy filing not including some subsidiaries for now.
