Tesla rival Fisker files for bankruptcy after failed investment talks
US electric vehicle manufacturer, Fisker, has declared bankruptcy after unsuccessful negotiations with a major automaker. The company filed for Chapter 11 bankruptcy protection late on Monday. This legal move comes as Fisker was rapidly burning cash to deliver its 'Ocean' SUV in the US and Europe. The company's unit, Fisker Group Inc, listed estimated assets between $500 million to $1 billion and liabilities ranging from $100 million to $500 million.
Fisker's strategic options post failed deal
Earlier this year, Fisker began considering strategic alternatives following the termination of discussions with a large automaker. These alternatives included in-court or out-of-court restructurings and capital market transactions. While Fisker has not officially identified the company involved in these talks, reports suggest that Nissan was in advanced stages of discussions to invest in the startup. The Tesla rival had also planned to debut in the Indian market.
Fisker's financial struggles and market challenges
Fisker, founded by automotive designer Henrik Fisker, had previously voiced concerns about its ability to sustain operations back in February. The company had stopped investments into future projects until it secured a partnership with an automaker. This decision was driven by factors such as tight access to capital in a high interest rate economy, costs linked with marketing and distributing its vehicles, and slower-than-expected demand for electric vehicles (EVs).
