Danish automotive designer and entrepreneur Henrik Fisker may be heading for a second bankruptcy. Shares of Fisker went into freefall Thursday after the Wall Street Journal reported the executive’s latest car company is seeking the help of restructuring experts in preparation for a possible bankruptcy. Earlier this month, Fisker advised analysts and investors the startup is facing going-concern risks due to slow sales and weak revenues. It is unclear whether a potential tie-up with Nissan will be enough to overcome a fast-worsening cash crunch.
Fisker hands over keys to one of the first production versions of the Ocean in May 2023.
Shares of EV startup Fisker were down by as much as 60% during Thursday trading, to as low as 14 cents. Investors began fleeing the already weakened stock after the Wall Street Journal reported the automaker had hired financial adviser FTI Consulting and the law firm Davis Polk, apparently to begin work on a bankruptcy filing.
The health of the company has become increasingly doubtful in recent months as it has fallen well short of sales and earnings targets – and despite reports early this month indicating Fisker was negotiating a deal with Nissan that could, among other things, generate as much as $400 million in cash.
“Substantial doubts”
Neither Henrik Fisker, the automaker’s founder and CEO, nor other company representatives, have so far responded to requests for comment on the WSJ report.
But the executive, a longtime designer for companies including Aston Martin and Ford Motor Co., has been increasingly pessimistic about the future of his second effort to start a car company. (His first, Fisker Automotive, went bankrupt a dozen years ago.)
Fisker took an unusual approach, outsourcing production of the Ocean to Magna Steyr, a contract assembler in Austria.
With over $1 billion in debt, Fisker’s eponymous founder, Henrik Fisker, offered a glum assessment of the company’s future during a Jan. 29 earnings call. He waned there is “substantial doubt about Fisker’s ability to continue as a going concern.”
Among other things, he announced plans to cut 15% of the Fisker workforce.
More Fisker News
- “High Likelihood” of Tie-Up Between Nissan and Fisker
- Fisker Says His Company’s Future is in “Substantial Doubt”
- Fisker Again Scales Back Production Plans
Big plans
Fisker laid out big aspirations for his latest venture when it was first announced in 2016. But things haven’t gone nearly according to plan. The launch of the company’s first product, the all-electric Ocean crossover, was repeatedly delayed and production volumes were well short of expectations due to a variety of problems.
Fisker reportedly is negotiating a deal with Nissan which would see the Japanese automaker assemble the Fisker Alaska pickup.
Complicating matters, Fisker laid out an unusual business strategy which, the CEO initially claimed, would allow his new company to get up-and-running with a minimum of capital. Instead of setting up its own assembly plant, as other startups like Tesla, Rivian and Lucid have done, Fisker outsourced production to Magna Steyr, a contract manufacturer. It has a history of assembling low-volume niche models but never worked as the sole source producer.
A white knight
Even as Fisker’s fortunes have faded, the company has struggled to rally support. Last August it revealed an assortment of all-electric concept vehicles, including the entry-level PEAR crossover, the Ronin supercar, and the Alaska pickup.
The latter model appears to have generated some interest at Nissan, the automaker that launched the first mainstream battery-electric vehicle, the Leaf, in 2011. According to various sources, Nissan is discussing the opportunity of producing Alaska for Fisker and using its underlying platform for new EVs of its own. The deal reportedly also would see Nissan provide Fisker with $400 million in desperately needed capital.
But, even though a well-placed source told Headlight.News, “There is a high likelihood of this happening,” it appears such a deal might not be enough to head off a bankruptcy filing by Fisker.
Neither Nissan nor Fisker have responded to questions about the reported negotiations.
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