Electric car maker Fisker files for bankruptcy, leaving thousands of EV owners with uncertain future

Electric vehicle startup Fisker filed for Chapter 11 bankruptcy protection in June 2024. The news ends months of speculation over the future of the company and marks a critical point in the company’s tumultuous journey. Fisker is now focused on selling its assets and restructuring its debt after halting production of its sole vehicle model back in March.

However, the bankruptcy filing has left Fisker owners in a state of uncertainty, raising concerns about the future of their vehicles. Approximately 6,400 customers who purchased the Ocean SUV, Fisker’s debut electric vehicle, now face challenges regarding repairs, maintenance, and software updates, according to a report from Wired Magazine.

One such owner, De Bardi, shared his concerns in an interview with Wired. “The bankruptcy lit a fire. We had to get organized if we had any chance of representing owners’ interests,” he said. Within days, De Bardi and a few other Fisker owners formed a nonprofit organization called the Fisker Owners Association, dedicated to keeping their cars operational. By the end of the month, 1,200 owners—nearly a fifth of all Fisker cars sold—had registered with the group, De Bardi reported.

Fisker vehicle owners have mostly practical concerns. The Ocean SUV, priced from $41,000 to $70,000, was found to have significant build quality issues and software glitches, including an unresponsive central touchscreen. Wired’s reviewer declined to rate the vehicle, calling it “just not ready yet.”

Fisker Ocean

Some of the most serious issues, such as a difficult-to-use brake hold and Bluetooth connectivity problems, were addressed through software updates. However, getting vehicles serviced or repaired remained challenging due to a shortage of certified Fisker technicians. Initially, Fisker adopted a Tesla-like direct-to-consumer model, avoiding traditional dealerships. However, in January, the company began signing dealerships to a new network, citing the high costs of the direct model.

The bankruptcy news followed a series of layoffs at Fisker, with hundreds of employees let go in an attempt to stay afloat. The layoffs were announced during an all-hands meeting in May, with sources indicating that CEO Henrik Fisker claimed he was not directly involved in the decision.

The potential causes for Fisker’s downfall are being debated. Quality control issues with the Ocean model and possible mismanagement are among the suggested reasons.

Adding to the company’s woes, a recent recall of all Oceans sold in the US due to a potentially faulty door handle mechanism has left owners concerned. With the company in bankruptcy, obtaining parts for repairs could become a significant challenge.

The future for Fisker and its customers now hinges on the outcome of the bankruptcy proceedings. Fisker Ocean owners can only hope for a resolution that keeps their electric vehicles on the road and their sustainable driving dreams alive.

Before filing for bankruptcy, Fisker went through several rounds of layoffs this year. In February, the company announced a 15% workforce reduction. As of April 19, Fisker employed 1,135 people, according to a regulatory filing. This number was further reduced following layoffs in late April, another round in late May, and the most recent cuts on Wednesday.

Despite these setbacks, Henrik Fisker expressed a determined outlook, emphasizing that the company had built “something great” and would continue to sell its Ocean SUV to interested customers.

Fisker’s challenges have been mounting throughout the year, marked by an indefinite halt to Ocean crossover production, the closure of its California headquarters, and multiple rounds of layoffs. Additional job cuts were confirmed today through social media posts and accounts from former employees.

Founded in 2016 by Henrik Fisker, the company went public on October 30, 2020, after a reverse merger with Spartan Energy Acquisition Corp. Fisker’s stock began trading on the New York Stock Exchange (NYSE) under the ticker symbol FSR. In June 2021, Fisker’s stock was added to the Russell 3000 Index.