Fisker, the American electric vehicle manufacturer, filed for bankruptcy protection on Monday evening after negotiations with a major automaker fell through, leaving the startup in a difficult position as it rapidly burned through cash to deliver its "Ocean" SUV to the US and Europe.
Fisker's subsidiary, Fisker Group Inc, filed for Chapter 11 bankruptcy protection, with assets estimated between $500 million and $1 billion, and liabilities estimated between $100 million and $500 million.
Due to the termination of negotiations with a major automaker, Fisker had to seek strategic alternatives, including restructuring both inside and outside of court and engaging in capital market transactions. Earlier this year, the company had indicated it was considering these options.
Although Fisker did not disclose the specific company name, Reuters reported that Japanese automaker Nissan had been in deep investment talks with Fisker.
Founded by car designer Henrik Fisker, the company cast doubt on its ability to continue operations back in February and halted investments in future projects until a partnership with an automaker was established.
In an economic environment with high interest rates, capital became harder to access, coupled with marketing and distribution costs and a slowdown in electric vehicle demand growth, which all contributed to the company's dwindling cash reserves.
The sluggish growth in electric vehicle demand particularly affected startups like Fisker, while competitors implemented layoffs and delayed expansion plans to conserve cash.
