It has been a turbulent couple of months since Fisker Inc. posted its Q4 2023 financial report and relayed concerns it could continue business in EVs. Fisker’s Austrian arm has reportedly filed for reorganization and court protection from creditors – the equivalent to Chapter 11 Bankruptcy in the US.
Today’s news is merely the latest chapter in a rough saga for Fisker Inc., the American EV startup hanging by a financial thread in its second attempt to mass-produce passenger EVs. The potential bankruptcy news is not all that shocking, as Fisker has been slowly sinking toward this point for over a year now.
Although Fisker successfully launched its flagship Ocean SUV, it was quickly hit with several software issues and lower-than-anticipated sales. As a result, the automaker lowered its production targets several times throughout 2023 while pulling any demand levers to maintain liquidity.
This past March, Fisker’s 2023 numbers painted a grim image of “substantial doubt” it could continue… at least not without the financial backing of a new OEM partner. However, those talks came and went, and Fisker has been fighting for its life to avoid bankruptcy since.
Its stock tanked after Fisker halted Ocean production at Magna-Steyr in Austria, which was quickly followed by the automaker slashing tens of thousands off Ocean MSRPs to liquidate its existing stockpile of assembled vehicles.
Despite such great discounts, the public grew weary of buying an EV from an automaker on the cusp of bankruptcy and no guarantees Fisker will be in business a year from now. As such, over 40,000 reservation holders canceled their Ocean orders.
Not one to ever give up, Fisker Inc. says the restructuring in Austria will offer the business a little more time to woo a new investor.
Magna Steyr takes financial hit as Fisker bankruptcy looms
Per an initial report from Automobilwoche, Fisker GmbH, the Austrian arm of Fisker Inc., has filed for reorganization and court protection from creditors overseas—a filing similar to Chapter 11 bankruptcy in the US. Fisker responded with an official statement on the matter posted on Tuesday:
Fisker GmbH (“Fisker Austria”), the Austria entity of Fisker Inc. (“Fisker”), today announced that it has voluntarily filed to open a restructuring proceeding via self-administration under the Austrian Insolvency Code. The proceeding will enable Fisker Austria to ensure its operations are able to continue under court protection, including paying employees and selling vehicles. Fisker Austria intends to continue delivering its vehicles to customers to the extent possible, providing service, and updating its over-the-air software as it moves through the restructuring proceedings.
Fisker continued by stating the bankruptcy-filing-equivalent will give the automaker more time to acquire a “value-maximizing strategic transaction or other sale of assets.” The American automaker also made a point to say the restructuring filing in Austria remains separate from Fisker’s other entities, which will continue operations. For example, Fisker continues to add dealers to its network in the US and Europe to help boost sales of the Ocean EVs that have already been built.
Meanwhile, however, Magna-Steyr has been left with its pants down. With Ocean assembly lines now halted, the Austrian arm of Magna International says it will lay off at least 500 employees in Graz before the end of the year. Furthermore, Magna had to adjust its projected sales and earnings for the fiscal year and expects to take a $400 million revenue hit.
Magna will be fine in the long run, but it will take time before it can segue into a new manufacturing contract and start building vehicles again should Fisker officially sink into bankruptcy. Magna Steyr CEO Roland Prettner told local media the factory will have fresh orders again, but “The next three years will be very difficult in Graz.”
Bankruptcy feels imminent at this point, but Fisker could sway an angel investor to bail it out and keep going. We will report back as this ongoing tale of the EV startup continues… or doesn’t.
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