After its plans proved abortive in multiple ways, leaving it with no clear way forward and its cash largely exhausted, GM electric vehicle rival Fisker filed for bankruptcy on Monday, stating “sale of our assets under Chapter 11 is the most viable path forward for the company.”
Per reporting by Automotive News, quality issues are among the significant nails in the Fisker coffin, with its Ocean EV SUV suffering from faulty software and other potentially dangerous issues, such as sudden activation of the automatic emergency braking absent any obstacles.
The Fisker Ocean SUV.
The National Highway Traffic Safety Administration (NHTSA) has opened multiple probes into the Ocean SUV, which also fails to meet certain U.S. safety standards. In some instances, the warning lights in Fisker EVs fail to properly activate and notify the driver of conditions potentially leading to a crash. Some reports indicate Ocean EVs may fail to go into Park, causing rollaways with or without the driver present in the vehicle.
Fisker has likewise burned through much of its cash in the process of bringing the Ocean to market, with a reported fourth-quarter net loss of $463 million. Austrian contract manufacturer Magna Steyr expects to lose $400 million in 2024 on its contract to produce the Fisker Ocean. Both Fisker and Magna Steyr are laying off workers in response to the situation.
The EV startup attempted to reverse its failing fortunes through an alliance with Nissan according to earlier reporting by Reuters. However, the Japanese automaker, currently a subsidiary of Renault Group, was not receptive and the attempt fell through, leaving Fisker to choose bankruptcy as its only way forward.
The carmaker, which has about 12 active dealership franchises, says the bankruptcy comes because it “faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently,” which it says is similar to problems faced by “other companies in the electric vehicle industry.” At least two other EV startups, Arrival and Lordstown Motors, are in liquidation, while Rivian posted billion-dollar losses in the first quarter despite being in better financial condition overall.
2026 Chevy Bolt EV Rendering
While the affordable Ocean SUV appears to be sinking, GM has declared that the upcoming 2026 Chevy Bolt EV will be America’s thriftiest electric vehicle when it hits showrooms in 2025.
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Comments
This is very sad, but not surprising news. It’s really too bad Fisker couldn’t make it work this time. Wonder what will happen to all the unsold inventory, and if the safety software will ever get updated so existing owners can safely drive their vehicles.
I feel sorry for the people who bought their cars, but this happening should have been a known risk. I’d barely be comfortable buying a vehicle from Rivian or even Tesla, and they are on a lot more solid footing than this company ever was.
I am wondering if this is a harbinger of the entire current situation with EV’s. Consumer pushback on cost, range anxiety, convenience, charging difficulties, and potential poor resale value have many customers wary of a purchase at this point.
Well I long have been arguing that if anyone is best prepared to transition to EVs its the legacy automakers. NOT the startups. They have ICEs and HEVs to fall back on and can continue to offer EVs and invest in them. Tesla may be ok but remember Tesla grew at a time when interest rates were low and it was the only option out there. Companies like Fisker, Lucid, and Rivian don’t get that luxury and its showing here in Fisker and in the layoffs and price dropping with Tesla, Rivian, and Lucid. Fanboys can argue all they want but the numbers in the transactions don’t lie.
I’d agree with pretty much all of that, but would note that Rivian has Amazon for sales, and I believe as an investor too if I recall correctly. Still not comfortable buying them, but I don’t want anything they offer either. Maybe their yet to be produced low cost offering might change that.