Fisker Group files for Chapter 11 bankruptcy and expects to sell off assets

Fisker Group, Inc. has filed for Chapter 11 bankruptcy in the District of Delaware and is planning on the sale of Fisker assets. Other subsidiaries and Fisker, Inc. are not included. Effectively, the company's production operations, which have been halted, will be disposed of in the sale while customer support and office operations will continue as Fisker exits the market. For 2023, Fisker only managed to deliver 4,929 Fisker Oceans at a -35% gross margin, which is 1,103 fewer vehicles than Rolls Royce delivered at a positive margin.

Readers who continue driving Fiskers should not expect parts, software updates, or repairs to be readily available. This is similar to old Apple iPhones, which had support withdrawn years ago. For example, it is not known whether Fisker will be able to update the defective VCU and MCU software for current Ocean SUV owners per their May 29th recall, or address the issues in currently open NHTSA investigations.

Readers who are in a lease are generally safe since leased Fiskers will return to company ownership at the end of a lease, but those who have bought Fiskers on loan should expect the value of their cars to be effectively zero ($0). The reason for this is car dealers generally do not take trade-in vehicles from companies that have gone out of business because there is no expectation of continued support, parts, batteries, software updates, or repairs. Private party sales can still net some cash at a significant discount versus previously expected used car values.

The EV automotive market is very competitive, and only Tesla has managed to turn a profit after more than a decade of continued losses – and even Tesla sales are down this year as buyers and companies turn away from the brand. All other startup EV companies have not turned a profit and continue to burn through millions in their attempt to establish an EV foothold against established makers such as Mercedes-Benz, Ford, and Toyota.

The advantages these large manufacturers have include deep pockets to fund decades-long electrification and hybrid projects, well-established, extensive dealership networks for sales, service, and parts, and long-established partnerships with parts manufacturers. The sheer cost of testing a new model for crash safety and reliability cannot be underestimated as a significant barrier to new entrants, and even the combustion engine car industry has had hundreds of companies try and fail.

Readers who want to learn more about electric cars can pick up a book on its history and the trade-offs of electrification. Readers who realize that they’re a bit too lazy might want to buy a nice, human-powered bicycle for healthy exercise during local trips to the market, library, and park.

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