Fisker Pauses Production For Six Weeks, Raises $150 Million to Fend Off Bankruptcy
Key Takeaways
- Fisker pauses Ocean SUV production for six weeks to balance inventory levels.
- Fisker says $150 million in funding has been secured.
- Looming bankruptcy concerns remain despite new investments.
The outlook for EV startup Fisker continues to be bleak as the company pauses production of its Ocean SUV for six weeks and awaits $150 million of recently secured funds. The new infusion of cash is arriving in four payments coming from an unspecified existing investor.
Fisker recently announced it was in talks with a major automaker for an investment deal that could help provide the cash flow it needs to continue operations. Reports indicate that the automaker is Nissan, although neither has confirmed negotiations. Nissan could make use of Fisker’s Alaska pickup truck, reducing development costs, while Fisker would enjoy a healthier balance sheet.
Balancing Inventory
The pause in production should help Fisker balance its current Ocean inventory. Roughly 1,000 units have been built this year so far with 1,300 deliveries worldwide in the same time, but the company still has excess vehicles on hand. There were approximately 4,700 Oceans in inventory as of March 15 with a value of over $200 million.The six-week production pause should help align those levels with demand.
Related
Fisker CEO Confirms Affordable Pear EV Has Been Delayed
The company is in talks with an unnamed automaker for potential investment and electric vehicle co-development.
Earlier this month, the company announced that the upcoming Fisker Pear was delayed to focus on Ocean production. At that time, company CEO Henrik Fisker mentioned a deal with another automaker as the reason for the delay, citing the possibility of North American manufacturing.
Looming Bankruptcy
During the February earnings call, Henrik acknowledged that 2023 was a challenging year for the company. A myriad of problems including supply issues translated into delayed customer deliveries. He detailed complications from rising interest rates to a lack of skilled labor, but all customers saw were empty driveways where they expected to see a new Ocean SUV.
In the official release, the company addressed its liquidity, acknowledging that there is “substantial doubt about Fisker’s ability to continue as a going concern.” That was at the end of February. One month later, there’s a lifeline in the form of additional investment and potential partnerships, but avoiding bankruptcy is far from certain; this cash injection just keeps Fisker afloat while it searches for a true savior.
