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Fisker, a maker of electric vehicles, filed for Chapter 11 bankruptcy. It is the second startup to do so within the last year. Even industry leaders are struggling to attract more buyers than the early adopters.
Fisker Group Inc. stated in a filing to the U.S. Bankruptcy Court of Delaware that it estimated assets between $500 million and one billion dollars. It estimated liabilities between $100 million and 500 million, with 200 to 999 creditors.
“Like many other companies in the electric car industry, we’ve faced various market and macroeconomic challenges that have affected our ability to operate efficiently,” said the company in a prepared announcement late June 17. “After evaluating our options, we determined that selling our assets under Chapter 11 was the best option for the company.”
Henrik Fisker founded the electric car company in 2007, and he is its Chairman and CEO. He designed the company’s 2022 Ocean, an all-electric SUV, as well as its luxury plug-in hybrid Karma launched in 2011. Fisker was also responsible for the development of BMW Z8 sports cars. Fisker-Bankruptcy
Fisker, located in Manhattan Beach, Calif. and other startups, such as Lordstown Motors Corp. sought to compete with industry leaders, like Tesla, and the big automakers from Detroit, who have entered the market aggressively.
EVs sales have slowed, as manufacturers try to push electric cars into the mainstream. These sales have been curtailed by both a lack in infrastructure and rising inflation, which has made car loans more costly.
According to J.D. Power, the number of electric vehicles sold in the first three quarters of this year grew by only 3.3%, to almost 270,000. This is far below the 47.6% growth that drove record sales last year and a 7.6% share of the market. Power. The slowdown, largely due to Tesla, confirms the automakers’ concerns that they acted too quickly in pursuing EV buyers. The EV share in total U.S. retail sales dropped to 7.15% during the first quarter.
This has led to massive price cuts and job reductions at leading companies such as Tesla.
Rivian is another electric startup that has announced this year it will be pausing the construction of its $5 Billion manufacturing plant in Georgia, to speed up production and save money.
Lordstown filed for bankruptcy protection last summer due to funding problems.
Fisker was warned by the New York Stock Exchange in early this year after its stock fell below $1. Fisker’s shares weren’t immediately delisted, and the company said at the time it planned to stay listed on the NYSE.
Fisker Inc., and other U.S.-based subsidiaries, as well as subsidiaries outside of the U.S. are not included in the bankruptcy filing. Fisker has said that it is in advanced discussions with financial stakeholders regarding debtor-in possession financing and selling assets.