Two years ago, an employee at Fisker Inc. told me: The most pressing concern within the electric car startup wasn’t whether or not its Ocean SUV would be built. Fisker has been outsourcing the manufacturing of its first electric car to well-respected auto supplier Magna. The startup’s goal of starting production in November 2022 was aggressive, but not impossible for a company like Magna, which makes cars for the likes of BMW.
Instead, this person said, employees were increasingly concerned that Fisker would not be prepared to deal with all the problems that would come. after A company puts a car on the road. They were concerned that all the focus was on building the car and not the company.
The conversation stuck with me because Fisker’s founder and CEO, Henrik Fisker, had failed at starting a car company a decade earlier, which is probably why. That company, Fisker Automotive, got a hybrid sports car into the hands of a few thousand customers. But the company backed down soon after when faced with quality complaints, a failed battery supplier, and a hurricane that literally sank a ship full of the vehicles.
The employee’s warning that the new Fisker was headed down a similar path was both eye-catching and ultimate. Fisker filed for Chapter 11 bankruptcy protection this week after spending just one year shipping its SUVs to customers around the world. Its decline is largely directly related to its inability to address employee-raised concerns in 2022.
This person was not alone. Dozens of others who worked at Fisker have echoed that sentiment to me in conversations since then, almost all on the condition of anonymity because they feared losing their jobs or company retaliation. Those conversations informed stories I wrote about Ocean’s quality and service problems, Fisker’s internal chaos, and the decisions made by Henrik Fisker and his co-founder, wife, CFO and COO Geeta Gupta-Fisker that led to the company’s downfall.
Most of them told me how deep the lack of preparedness runs and permeates almost every department of the company, as I previously reported for TechCrunch and Bloomberg News.
The software that powers the Ocean SUV was incomplete. He. She Contributed to the delay in the launch of SUVsIt even halted the first delivery in May 2023, which Fisker had to return and troubleshoot shortly after delivery. Something similar happened when the company made its first US deliveries in June 2023, when one of its board members’ SUVs lost power shortly after they took delivery.
The company shipped far fewer SUVs in the ocean than it originally expected. Even after lowering its 2023 target several times, it is still struggling to meet its internal sales targets. Sales staff told stories of repeatedly calling potential customers in hopes of selling cars because there were so few new leads. Others ended up selling cars even if they worked in completely different departments.
Many customers who have received their Ocean have experienced issues such as sudden power outages, problems with the braking system, faulty key fobs, problematic door handles that can cause them to temporarily lock in or out of the vehicle, and buggy software. (The National Highway Traffic Safety Administration has opened four investigations into the perimeter.)
Fisker has struggled with the quality of some of its suppliers, and employees said it had not built up an adequate inventory of replacement parts. This put increased pressure on the people responsible for trying to fix cars when they ran into problems, and eventually led to the company withdrawing parts not only from the Magna production line in Austria, but even from Henrik Fisker’s own car. (Fisker denied these allegations.)
All this time, lower and middle-level employees have made great efforts to do what they can to help the slow-growing customer base. One owner told me that an employee received a phone call on his personal cell phone while attending a funeral. Other employees told stories of workers conducting company business while in the hospital. Many of them have worked long days, nights and weekends — so much so that at least one hourly employee has filed a potential class action lawsuit over this very issue.
The company itself has admitted on multiple occasions that it does not have enough staff to handle the influx of customer service requests. This was another place where employees from other departments participated. Some of them still field customer calls today, even though they left Fisker weeks or months ago.
Fisker struggled with the mundane and serious business of being a public company as well. It lost about $16 million in customer payments at one point, thanks to chaotic internal accounting practices. It has suffered multiple delays in filing required reports with the Securities and Exchange Commission. One of these delays allowed one of the company’s largest lenders To finally take control In recent months.
Despite all this, so is Fisker He’s still promoting His speed to market as an achievement as he begins the bankruptcy process. “Fisker has made incredible progress since our founding, bringing the Ocean SUV to market twice as quickly as was expected in the auto industry,” a Fisker spokesperson said in a press release about the Chapter 11 filing.
The ephemeral company representative goes on to say that Fisker “faced numerous market and macroeconomic headwinds that impacted our ability to operate efficiently.” While this is certainly true to some extent, there is no reflection on the myriad issues that have brought the company to this moment in time.
Perhaps that will emerge in Chapter 11 proceedings, as the company looks to settle its debts (which it claims it owes between $100 million and $500 million) and offload or restructure its assets (which total between $500 million to $1 billion).
What happens next will depend on how those proceedings go. Fisker has always taken an “asset-light” approach, likening itself to how Apple tapped Foxconn to help turn the iPhone into a global phenomenon. The problem with having fewer assets is that it naturally means there is less to borrow or sell when things go wrong.
Magna has halted production of Ocean and expects $400 million Loss of revenue This year as a result. It’s unclear how much progress Fisker has made on its future products, such as the sub-$30,000 Pear EV and the Alaska pickup truck. The engineering firm that co-developed these vehicles with Fisker recently filed a lawsuit against the startup, throwing the projects into question.
Fisker said in its press release that it will continue “reduced operations,” including “maintaining customer programs and compensating needed vendors on a going forward basis.” In other words, it will continue to run a core operation if there is a willing buyer for the assets it is offering for sale in a Chapter 11 case.
A decade ago, bankrupt Fisker Automotive found a buyer. It eventually turned into a startup known as Karma Automotive, which nominally still exists today. There have been similar results recently. Three other electric vehicle startups that recently filed for bankruptcy — Lordstown Motors, Arival, and Electric Last Mile Solutions — were able to sell their assets to peer companies in the space.
But the final fate this The startup and its assets wouldn’t change the fundamental problem: Fisker wasn’t prepared to deal with bringing a flawed car to market.