Fisker has come a long way since it was widely considered the next great EV startup. It’s been a chaotic year for the company, forcing it to declare Chapter 11 bankruptcy protection on June 18. From there, the firm endured shaky finances and difficulty in production. Coupled with a wave of probes, these problems further underscored how treacherous the pathway to widespread success would be. This article provides a comprehensive timeline of the key events leading to Fisker’s decline, detailing the missteps and decisions that led to its ultimate downfall.
In the months leading up to Fisker’s bankruptcy filing, Fisker had to make large-scale employee layoffs. On Leap Year Day, they announced the layoff of 15% of their employees. Then the company made the unreported epic faux pas of disclosing seriously negative financial disclosures. It suggested that it would potentially run out of cash within the next 12 months. These alarming revelations were the game change for Fisker. The firm had been under heavy pressure to deliver on its extraordinarily lofty production and sales goals.
Production and Delivery Challenges
Fisker’s production troubles became evident pretty much by January 1. It then became apparent that the company was far from the lofty goal it had set for itself of delivering 300 electric SUVs each day globally. Fisker shot for the moon, but the moonshot goal got away. Consequently, they were forced to lower their production targets multiple times in the first half of the year.
After a volatile rollout, Fisker could not meet aggressive production targets. Their disorganization extended to scaling up deliveries, leading to severe financial improprieties. On March 27, news came that Fisker had temporarily lost track of hundreds of millions of dollars in customer deposits. This incident happened during a major ramp-up period for the company. These sorts of operational blunders were among the many growing troubles the company was facing.
On top of that, product development issues with Fisker’s flagship model, the Ocean SUV, began to multiply. Consumers have documented more than 100 distinct loss-of-power occurrences with the vehicle since its first fleet delivery on February 9. These events raised a lot of concerns about whether the Ocean SUV was a viable or safe automobile. As a result, a recall was issued on June 12 due to malfunctioning warning lights.
Investigations and Financial Troubles
Fisker’s troubles compounded as, on Sept. 22, the National Highway Traffic Safety Administration (NHTSA) opened its second investigation into Fisker’s Ocean SUV. This increased scrutiny started on February 16th. This investigation increased the focus on the vehicle’s performance and safety qualities. As a result, consumer confidence was further undermined in the brand.
Even though financial pressures grew, Fisker still made employee layoffs well into the fourth quarter to save cash. Less than three weeks later, on April 29, even deeper cuts were announced, reflecting an urgent need for a drastic cost-cutting approach. Resisting pressure from within their ranks, the company’s leadership moved quickly. Yesterday, July 9, Henrik Fisker and his wife Geeta Gupta-Fisker elected to reduce their salaries to $1 per year. This decision was to show that they were willing to suffer for the company through the hard times.
Even with these actions taken, by June 18, Fisker found itself left with no other option than to seek Chapter 11 bankruptcy protection. Though it was a dangerous move, the decision reflected the company’s precariousness. It shone a spotlight on its inability to address the litany of issues plaguing its operations.
Final Days and Abandonment
In the aftermath of Fisker’s bankruptcy filing, reports emerged regarding the abandoned state of its headquarters facility in La Palma, California. Our landlord put it in stark terms, saying the building was in “total chaos.” Clay models of hazardous waste and abandoned vehicles cluttered the area, acting as harsh testimony of the company’s quick downfall. Such conditions were indicative of the level of contempt that had occurred within the agency.
As Fisker’s story unfolded throughout 2023, it became evident that the company’s challenges were compounded by its flawed Ocean SUV. Fisker’s inability to deliver on market promise and customer expectation was due to major mechanical and software defects in the car. These issues were clearly central to the company’s difficulties.
Trading on the New York Stock Exchange remains halted due to Fisker’s rapidly declining financial situation. The company’s formerly bright future now totally depends on luck. The company’s ups and downs offer important warnings for the nascent EV sector. It lays bare the need for better management practices and consistent, dependable operations.
