And Down Goes Fisker

AP Photo/Michael Hill

The EV retail market just lost another one of its marquee, OG play-yahs: Fisker.

Fisker filed for bankruptcy protection late on Monday, as the U.S. electric-vehicle maker looks to salvage its operations by selling assets and restructuring its debt after burning through cash in an attempt to ramp up production of its Ocean SUVs.

The hyper-competitive EV market has seen several companies, including Proterra, Lordstown and Electric Last Mile Solutions, file for bankruptcy in the past two years as they grappled with weakening demand, fundraising hurdles and operational challenges from global supply chain issues.

The company, founded by automotive designer Henrik Fisker, flagged doubts about its ability to remain in business in February and later failed to secure an investment from a big automaker, forcing it to rein in operations.

The collapse of its talks with the automaker - which Reuters had reported to be Nissan - meant that it was denied $350 million in funding from an unnamed investor that was contingent on the automaker’s investment and forced Fisker to explore options.

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There's an interesting interview with Elon about Tesla vs. Fisker from a decade ago making the rounds again now in light of this bankruptcy filing yesterday evening. Pretty enlightening hearing a true tech wonk kind of diss...okay. Not "kind of" - he politely as possible dunks on Henrik Fisker for his focus on design. Fisker, coincidentally, was at one time a design consultant for Tesla.

It also seems prescient in a way because this was a second shot for Fisker to begin with. The company had declared bankruptcy in 2013, victim of both the 2008 financial crisis and a massive recall thanks to a faulty battery - kind of a critical component in an EV - in their earlier model. A hurricane swamping 300 of their Karmas in inventory was pretty devastating, too.

A major part of what sank Fisker this go-round was trying to introduce its Ocean SUV. Again, the roll-out was plagued with technical problems that led to severe delivery issues, among other eventually fatal missteps.

It turns out that "outsourcing" the manufacturing of your vehicles - Fisker said he wanted to be the "Apple of the auto industry" - can be no bueno.

...The listing was a second chance for its Danish CEO and founder to build an auto business after his first venture, Fisker Automotive, filed for bankruptcy in 2013, falling victim to the 2008 financial crisis and a battery failure in the Karma hybrid sedan that had led to a substantial recall.

...The “asset light model” was meant to reduce development times for vehicles and lower costs to take a vehicle to the market.

Its Ocean SUV, however, was wrought with software and hardware issues, with Consumer Reports, an influential non-profit, calling the vehicle “unfinished business.”

The car is also under regulatory investigation for braking issues, problems with shifting into park and other modes and failure of doors to open at times.

After delivering less than half of the more than 10,000 vehicles it produced last year, Fisker turned to a dealership-based distribution model in January, abandoning the direct-to-consumer approach pioneered by Tesla.

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It also seems like industry insiders weren't exactly caught off guard by Fisker's demise, calling it "Sad but predictable."

  • 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.

Spiffy looking vehicle, but hey. Schlitz happens

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Especially when you're running a half-asterisk business on a lot of other people's money.

Oh - did I not mention that part yet? The outstanding debts they're looking to wriggle out from under (remember, this is Round Two for this guy)?

...Fisker Group Inc. said in a filing with the U.S. Bankruptcy Court in Delaware that its estimated assets are between $500 million and $1 billion. It estimated liabilities are between $100 million and $500 million, with between 200 and 999 creditors.

Well, did you know - we paid for a really good chunk of Fisker's first failure party. 

When Fisker Automotive won heaps of praise from Vice President Joe Biden and a $529 million loan from the U.S. government, officials touted the Karma luxury sedan as getting up to 100 miles a gallon, going 50 miles on a full battery charge and offering "supercar" performance. None of those targets were met — but Fisker's moving ahead, your tax dollars in hand.

It's not like there weren't warning signs...and the usual brush-offs. And Biden waving big checks.

Standing in a shuttered General Motors plant in Wilmington, Del., Vice President Joe Biden heralded a half-billion-dollar Department of Energy loan that would transform the idled site into a production line for electric cars.

Folks, we’re making a bet,” Biden said on Oct. 27, 2009. “We’re making a bet in the future, we’re making a bet in the American people, we’re making a bet in the market, we’re making a bet in innovation.”

That loan is part of a $1 billion bet the Energy Department has made on two politically connected California electric carmakers producing sporty — and pricey — cutting-edge autos. One is Fisker Automotive, the project heralded by Biden and backed by a powerhouse venture capital firm whose partners include former Vice President Al Gore and a campaign donor to President Obama.

...Henrik Fisker, the renowned auto designer who founded the car company that carries his name, said his company holds tremendous promise and has accumulated $600 million in private financing.

When asked directly by ABC News if taxpayers should worry about the more than $500 million in federal funds on the line, he was emphatic:

No, I don’t think they need to worry about it,” Fisker said.

When asked if Fisker might be the next Solyndra, he said, “Absolutely not.”

On Wednesday, the company disclosed that production of the sedan has been pushed to 2013.

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Unsurprisingly, that turned out about as well as everything POTATUS touches. So, yeah - complete expensive, completely avoidable disaster. It really kind of was the next Solyndra, but who can keep track of that chump change anymore?

...Henrik Fisker's first attempt to start an electric car company came to an end in 2013 in bankruptcy. That collapse culminated a long downward spiral that began after Fisker received a $529 million loan commitment from the U.S. Department of Energy.

it was later learned that the U.S. Energy Department did not realize for four months that the flailing company, called Fisker Automotive Inc., had missed a crucial production target that was required as part of a half-billion dollar government loan. The mistake allowed Fisker to obtain an additional $32 million in government funding before the loan was suspended in June 2011.

Then starry-eyed "Green" investors gave Fisker more money to lather, rinse, repeat, and here we are today.

He's busted again.

I can't find anything on government loans for this company yet - there's nothing in any of the reports so far, so maybe we got lucky and dodged a bullet there?.

I'll do a tap dance or two myself if we did.

Maybe even the Electric Slide...

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John Stossel 5:30 PM | July 13, 2024
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