Fisker Electric Car Company Files for Bankruptcy Protection

A fresh blow has hit the electric car scene in the US as Fisker, founded by Henrik Fisker and Geeta Gupta-Fisker back in 2016, has filed for bankruptcy protection. Henrik Fisker, previously known for his work at Aston Martin, made a second attempt to shake up the electric vehicle market, but it ended in financial turmoil.

Fisker tried something different with their production methods, opting for an “asset-light” approach. Instead of building their own factories, they relied on others to assemble their cars. This was meant to save on costs, but it didn’t shield them from the problems that came their way.

The company faced delays from suppliers, which meant they couldn’t meet their production goals. On top of that, the cars they did manage to sell had their share of mechanical issues, leaving customers unhappy.

There was hope when talks began with a major automaker for investment and joint development. But those talks fell through, and production of their Ocean SUV had to be stopped earlier this year. It’s a familiar tale of promise turning to disappointment in the competitive world of electric vehicles.

The push toward electric cars, driven partly by Elon Musk’s Tesla success story, has inspired many to challenge the traditional car giants. However, these challengers often burn through billions of investor money, especially during uncertain times like the coronavirus pandemic.

But it’s not just about the money. Interest rates going up have made it harder for these companies to keep going. And even though electric cars are cheaper to run once you have one, they’re still more expensive to buy than traditional cars.

Competition is fierce, especially from Chinese companies, which has forced prices down even further. That’s made it even harder for companies like Fisker to turn a profit.

This isn’t just a US problem either. Companies in China, like WM Motor, have faced bankruptcy too. Even Nio, one of Tesla’s biggest rivals, had to get help from the government to stay afloat.

Fisker blames the tough economic conditions for their troubles. In their own words, “Like others in our business, we’ve had a rough ride because of how the markets have been. We looked at all our options and decided that selling our stuff under Chapter 11 is the best way to keep going.”

Chapter 11 gives Fisker’s main business a chance to keep going while it sorts out its money problems. It’s a lifeline, but there’s still a long road ahead.

It’s a tough break for Fisker and others in the electric car business. They took a chance, but sometimes that’s just how things go.