EV Start-Up Files For Bankruptcy One Year After Rolling Out Its First Model

An electric vehicle (EV) producer that was once a splashy start-up company has filed for bankruptcy.

Fisker filed for Chapter 11 bankruptcy on Tuesday after trying and failing to secure more investment to stay afloat, the company announced. The company once attracted robust interest and hype, marketing itself as the Apple of vehicles, but it struggled to run as a public company and was stuck with thousands of EVs that it did not sell, according to The Wall Street Journal.

“We are proud of our achievements, and we have put thousands of Fisker Ocean SUVs in customers’ hands in both North America and Europe. But like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently,” a Fisker spokesperson said in a statement. “After evaluating all options for our business, we determined that proceeding with a sale of our assets under Chapter 11 is the most viable path forward for the company.”

Representatives for Fisker declined to comment further.

Fisker raised about $1 billion from various investors, but it ran through most of its cash before defaulting on a debt payment to one of its leading investors, according to the WSJ. The company saw key executives head for the exits as it struggled to roll out its first model, the Ocean SUV, which was plagued by complaints about quality, including problems with the brakes.

Beyond any possible quality issues, the company also happened to start delivering the Ocean SUV at a time last summer when the EV market began to cool down and indications that consumer demand for EVs may not have been as robust as anticipated, according to the WSJ.

The company would build its EVs in Europe before shipping them to customers in the U.S., a business model that proved to be complicated once production started ramping up, according to the WSJ. A previous iteration of Fisker filed for bankruptcy in 2013 despite receiving millions of taxpayer dollars from the Obama administration to subsidize its operations.

Fisker is one of several EV start-ups that once drew considerable interest and investment that has subsequently fallen on hard times, according to the WSJ. The Biden administration is spending big and issuing major regulations to substantially increase EV adoption and production over the next decade, but even major manufacturers like Ford are losing billions of dollars on their EV product lines.