Report: Fisker Hired a Bankruptcy Consultant Ahead of Possible Restructuring
Fisker is on the ropes, telling investors that there were doubts it could continue operating without significant outside investment. Last week, it appeared that the help could come from Nissan in the form of a $400 million investment and tech-sharing agreement, but the company is now reportedly seeking help with a potential bankruptcy filing.
Electrek reported on the Wall Street Journal story, noting that Fisker’s unique contract with manufacturing partner Magna Steyr cuts into its profit margins but prevents runaway operating costs. Despite that, and the fact that Fisker said its Ocean SUV is profitable, running a car company is not for the weak or shallow-pocketed.
The automaker has seen challenges with its direct sales model, reaching a decision to move toward a more traditional sales model with dealer partners. While under-production has been an issue for some companies, Fisker has around $530 million of inventory to move. News of Fisker’s search for representation has not been kind to the company’s stock price, which fell 45 percent after hours.
It'd be easy to poke fun at Fisker, as this is the second time its founder has been through the wringer with a new car company. That said, the automaker’s designs and tech, particularly its pickup truck, would be useful to a company like Nissan or a similar firm. While it would be disappointing to lose an entire brand, Fisker can at least take some pride in the fact that it created novel designs and met its production timelines.
[Image: Fisker]
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Chris grew up in, under, and around cars, but took the long way around to becoming an automotive writer. After a career in technology consulting and a trip through business school, Chris began writing about the automotive industry as a way to reconnect with his passion and get behind the wheel of a new car every week. He focuses on taking complex industry stories and making them digestible by any reader. Just don’t expect him to stay away from high-mileage Porsches.
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Why buy it at full price when you can wait for it to go bankrupt and buy it for pennies on the dollar. You get the IP for cheap and let the creditor take the rest.
Like the early days of ICE automobiles, the blooming EV industry will be ripe with failures.
I'll be interesting to see how long the owners of EVs purchased from defunct companies last before most of them brick themselves from mechanical issues and/or lack of parts or software support. We still see the occasional old Pontiac or Saab beater decades after going belly up but I suspect most Fisker Oceans will be scrap less than a decade after the last one rolls of the assembly line.
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