Fisker Inc.

What did it do?

Fisker Inc. was a California-based electric vehicle company founded in 2016 by Danish car designer Henrik Fisker and his wife, Geeta Gupta-Fisker. In 2023 it launched the Fisker Ocean, an electric SUV built on the production line of its supplier Magna Steyr in Austria. It began trading on the New York Stock Exchange in 2020 through a SPAC merger.

Why did it shut down?

Fisker's only series-production vehicle, the Ocean, suffered more than 100 cases of power loss after delivery, along with other technical problems, leading to three separate NHTSA investigations and recalls. According to employees who spoke to TechCrunch, the company struggled to keep track of payments, built up no stock of spare parts and set up no team to audit supplier quality. In early 2024 it failed to repay a short-term loan and disclosed substantial doubt about its ability to continue operating. In March 2024 talks with a major carmaker collapsed and its shares were delisted. On 17 June 2024 it filed for Chapter 11 bankruptcy protection in Delaware.

The story

This was not the first time a car company bearing Henrik Fisker's name had come to the brink of bankruptcy. Fisker Automotive, which the Danish designer co-founded, halted production in 2012 after selling around 2,000 Karmas because of the bankruptcy of its battery supplier A123 Systems, and its assets were sold to Wanxiang Group in 2014. Having kept the rights to the Fisker brand, the designer founded Fisker Inc. with his wife, Geeta Gupta-Fisker, in 2016 for a second attempt.

The new company initially worked on solid-state batteries, but abandoned the plan in 2021 when it could not make the technology work. Its real bet was the Ocean, an electric SUV unveiled in 2019 promising a range of around 300 miles. In July 2020 Louis Bacon's investment firm Moore Strategic Ventures invested $50 million; days later a SPAC merger with the Apollo-backed Spartan Energy Acquisition was announced, valuing the company at $2.9 billion. Fisker began trading on the New York Stock Exchange in October 2020 and unveiled ambitious plans, such as the PEAR model, targeting a million units a year with Foxconn.

When the Ocean hit the road in 2023, the problems began. More than 100 cases of power loss were reported, the NHTSA opened three separate investigations and recalls followed. According to eight employees who spoke to TechCrunch, no stock of spare parts was kept, no team was set up to audit supplier quality, and parts needed for servicing were at times taken from the production line in Austria or stripped from returned vehicles. The company's communications chief denied most of these claims.

In early 2024 Fisker failed to repay a short-term loan. In March talks with a major carmaker collapsed, its shares were delisted from the New York Stock Exchange and most employees were let go. On 17 June 2024 it filed for Chapter 11 in Delaware. With the court's approval, the remaining Oceans were sold to a leasing company for around $14,000 per vehicle, $46.25 million in total; in October 2024 a bankruptcy plan was agreed with creditors.

Fisker's story shows that an attractive design cannot keep a car company alive without quality, service and financial discipline. Both of the same founder's companies failed the endurance test in their first years of production.

Lessons for founders

• If you go to market with a single model, plan after-sales service and spare-parts infrastructure as an investment every bit as important as production.
• When you outsource manufacturing, audit supplier quality with your own team; the quality of every part is attributed directly to your brand.
• Do not pin your rescue on a single big partner's signature; keep parallel funding options open before a crisis begins.

Sources

1. Fisker Inc. (Wikipedia)
2. EV startup Fisker files for bankruptcy (Reuters, 2024-06-18)
3. EV maker Fisker to be liquidated under plan to keep owners on the road (Los Angeles Times, 2024-08-24)

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