The cash-strapped US electric car industryStartup Fisker finds itself in increasingly severe turbulence. Just over a week ago, the company announced that it would suspend production of its only Ocean model sold to date at the contract manufacturer Magna in Austria for six weeks.
Fisker previously owed $8.4 million in interest on convertible notes. At the same time, Fisker stated that the company was negotiating a collaboration with a car manufacturer.
These negotiations have now failed, as the start-up announced on Monday before the US stock exchanges opened, but did not name any names. Rumor has it that this is… Nissan have acted. Due to the breakdown of negotiations, Fisker will not be able to meet the closing condition of a $150 million financing commitment that the company entered into with an investor earlier this month, Fisker said.
Trading in the shares, which are now just a penny stock, was temporarily suspended after another fall in prices on Monday. Fisker securities have already lost more than 95 percent of their value this year. In order to be able to comply with the regulations for a stock exchange listing on the US technology exchange Nasdaq, Fisker wants to have a reverse stock split voted on at the shareholders’ meeting on April 24th.
The electric car manufacturer, founded by Danish car designer Henrik Fisker, is stuck been in financial difficulties for a long time and had pointed out the risk of possible insolvency in February. Experts now think it’s more and more likely: “I can’t say whether it’s next week or next year, but it’s inevitable,” she quotes Reuters news agency
Thomas Hayes, head of hedge fund Great Hill Capital, on a possible bankruptcy of Fisker.
Cash has shrunk massively
Fisker is among the EV startups that went public at the start of the decade, many through mergers with special purpose acquisition companies (SPACs), which helped accelerate their rollouts. Their rise was due to the hope and enthusiasm of investors that the young electric car companies would one day Tesla could follow and gain a foothold in the highly competitive automotive industry.
According to the Wall Street Journal, the company’s cash had shrunk to around $121 million just over a week ago – less than a third of what was available at the end of last year. The company is the youngest automotiveStartup, which is threatened with bankruptcy. Electric truck maker Lordstown Motors and electric van maker Arrival have both filed for bankruptcy.
Fundraising has become difficult for loss-making electric car start-ups as they have little revenue to ramp up production and deliver to customers. At the same time, companies are struggling with tough competition, slowing demand and a difficult economic situation.
According to the Wall Street Journal, Fisker had sales of $273 million last year – with debt of more than $1 billion. Fisker built just over 10,000 vehicles in 2023 and delivered only 4,900 to customers.