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Fisker has Suspended Production of the Ocean SUV

Fisker Ocean SUV
Fisker Ocean SUV

Fisker, an electric vehicle startup, recently indicated preparations for a potential bankruptcy filing. Today, the company has announced a suspension of all-electric vehicle production, citing a need to adjust inventory levels and pursue strategic and financing initiatives. Starting the week of March 18, 2024, Fisker will halt production for six weeks.

In a recent development, Fisker has secured a conditional financing commitment from an existing investor of up to $150 million, organized in four tranches. However, the availability of these funds is contingent upon meeting certain conditions, including the submission of Fisker’s 2023 Form 10-K report. The specifics of these conditions have not been disclosed by the company.

The slowdown in EV sales in the US affects many, but Fisker’s journey has been notably tumultuous. The company’s decision to outsource manufacturing to Magna, a Canada-based supplier, may have contributed to a loss in quality control. Furthermore, criticisms have been directed at Fisker for emphasizing aesthetics over functionality, as evidenced by the build and software problems with its Ocean SUV. These challenges underscore the difficulty of breaking into an industry where longstanding experience, as seen with automakers like BMW, is invaluable.

Fisker is also exploring strategic options, confirming negotiations with a “large automaker” for a potential investment. This collaboration could include joint electric vehicle platform development and manufacturing in North America. Reports suggest that this automaker is Nissan, though discussions are reportedly in preliminary stages, with any deal contingent on several critical conditions.

The Fisker Ocean SUV has faced a series of quality concerns since its launch, including power losses, malfunctioning key fobs and sensors, unexpected hood openings, and brake issues. Notably, both a Fisker board member and the chief financial officer experienced sudden power losses in their Ocean SUVs, highlighting the vehicle’s reliability issues.

Fisker’s history is marked by ambition and challenges, dating back to when its founder, a former design director for BMW, Ford, and Aston Martin, introduced the Karma sports GT. Despite its innovative design, the Karma faced numerous setbacks, including unfavorable reviews and safety concerns.

Currently, Fisker reports having approximately 4,700 vehicles in inventory from both 2023 and 2024, valuing the completed vehicle inventory at over $200 million. The company delivered 1,300 vehicles in 2024 and a total of 4,900 vehicles to customers in 2023. Despite generating $273 million in sales last year, Fisker faces over $1 billion in debt and has expressed substantial doubt regarding its continued viability, a sentiment further underscored by the announced production pause.

(n.d.). Fisker Ocean. Fisker Inc. https://img.fiskerinc.com/image/upload/f_auto/q_auto/v1700612764/web%203.0/CMS%20content/vdp/Fisker-Ocean-Carousel-3200x2000_Z3A3184_1_xthqgy.jpg

(n.d.). Fisker Ocean. Fisker Inc. https://img.fiskerinc.com/image/upload/f_auto/q_auto/v1700534039/web%203.0/CMS%20content/vdp/_Z3A1580-3200x2000_Revised_3_gv6f5i.jpg

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