July 20, 2024

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How the once-promising EV maker went bottom-up

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Henrik Fisker stands with the Fisker Ocean electric vehicle after its unveiling at the Manhattan Beach Pier ahead of the Los Angeles Auto Show and AutoMobilityLA in Manhattan Beach, California. on Nov. 16, 2021.

Patrick T. Fallon | AFP | Getty Images

Fisker on Monday became the latest all-electric vehicle startup to file for Chapter 11 bankruptcy protection amid lackluster consumer demand, significant cash burn and operational and product issues.

For investors, the writing’s been on the wall for some time as Fisker issued a going concern about its ability to continue as a company in February, leading its charismatic founder and CEO Henrik Fisker to disappear from social media and the limelight.

It’s the latest in a series of EV companies to collapse. Other companies backed by special purpose acquisition companies, or SPAC, have also filed for bankruptcy protection. That list includes companies such as Proterra, Lordstown Motors and Electric Last Mile Solutions. Others such as Nikola and Faraday Future remain in business but trade for under $1 per share amid operational challenges, missed targets and broader industry headwinds.

It’s also a bit of déjà vu, as it marks Henrik Fisker’s second car company, both branded under his last name, to file for bankruptcy protection.

The new filing comes after the Fisker company failed to secure an investment from a big automaker to keep afloat. Nearly four years ago, Fisker announced plans to go public through a reverse merger with an Apollo-backed SPAC that valued the company at $2.9 billion. The deal infused Fisker with more than $1 billion in cash.

Fisker, like many other companies at the time, was fueled by low interest rates and a bullishness on Wall Street around EVs following the rise of U.S. electric vehicle leader Tesla.

“They looked at Tesla’s success, and Tesla was more of an anomaly than an example,” said Sam Abuelsamid, principal research analyst at Guidehouse Insights.

But consumer adoption for EVs has grown slower…

2024-06-18 14:29:37

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