Fisker Talks with Nissan Collapse; Bankruptcy Looms Larger

Talks between Fisker and Nissan have collapsed, the troubled EV start-up reported. And with its shares plunging on the news, trading was halted on the Nasdaq exchange as the likelihood of a bankruptcy filing grow larger.

Fisker Inc. confirmed Monday that the white knight it needs to stave off a looming bankruptcy has walked away.

Earlier this month, the EV start-up said it was in talks with a “large automaker” – subsequently revealed to be Nissan — interested in offering as much as $400 million in cash in return for gaining access to Fisker’s next-generation EV platform and related technologies. The negotiations have been terminated, Fisker said Monday, according to a report by the Reuters news service.

With Fisker shares quickly going into freefall, and with bankruptcy now a much likelier possibility, trading in Fisker stock was halted Monday on the Nasdaq exchange.

Options running out

Fisker’s fortunes have been looking increasingly bleak for months, with production and sales lagging far behind expectations, losses mounting and the company’s cash reserves all but gone. Then, late last month, Fisker’s eponymous founder, Henrik Fisker warned there was “substantial doubt about Fisker’s ability to continue as a going concern.”

But barely a week later, news surfaces that the start-up was in “advanced talks” that could lead to a new partnership. Among other things, Nissan was reportedly ready to invest over $400 million in Fisker’s EV program and would also build several new battery-electric vehicles off Fisker’s platform, including the pickup the start-up has been developing. In turn, Nissan would be able to use that new platform for some of its own EVs.

“There is a high likelihood of this happening,” a deeply placed insider advised Headlight.News, saying that the goal was to reach an agreement by the end of the month.

Nissan walks

Exactly why the talks between Fisker and Nissan collapsed is unclear but it certainly hasn’t helped that the California-based automaker has taken a number of other recent hits. That includes a scathing review by the influential Consumer Reports which called the Fisker Ocean, an electric SUV, “incomplete” and “inexcusable.”

Whatever the reason, Fisker shares fell to a low around 9 cents – down from a 52-week-high of $7.22 – before trading was halted. Under Nasdaq rules, Fisker could soon be delisted, even if it somehow finds a new benefactor.

With no alternative in sight, however, a bankruptcy filing seems increasingly likely. The company has already begun preparing for that process and Thomas Hayes, chairman at hedge fund Great Hill Capital, told Reuters on Monday that, “I can’t put it if it is next week or next year, but it is inevitable.”

More Fisker News

• Fisker Shares Collapse on Bankruptcy Report
• Consumer Reports Reviews Calls Fisker Ocean “Inexcusable.”
• Fisker Says His Company’s Future is in “Substantial Doubt”

A repeat performance

Fisker Inc. is the second attempt at creating a green-focused car company by Henrik Fisker, a one-time automotive designer known for his work at Aston Martin. His original firm, Fisker Automotive, produced the ill-fated Karma plug-in hybrid. As is the case with Fisker Inc., that company burned through its cash horde and was unable to raise new capital. It went into Chapter 7 bankruptcy, its remaining assets sold to a Chinese company now renamed Karma.

Fisker is by no means the only EV start-up that’s been struggling lately. Some, like Faraday Future and Lucid, are barely functional. Others, such as Lucid, have been kept alive with the help of deep-pocketed partners.

Fisker had hoped to avoid the pitfalls that have tripped up some of those other EV wannabes. Instead of setting up its own assembly line – typically a billion dollar project – it decided to turn to an outside manufacturer. Ocean has been rolling out of a plant in Graz, Austria operated by Magna Steyr. But the partnership has been plagued by supplier disruptions, shortages, design issues and manufacturing problems.