BENGALURU - American electric vehicle (EV) maker Fisker filed for bankruptcy protection late on Monday as deal talks with a big automaker collapsed, exposing the startup to the fallout of a rapid cash burn to deliver its 'Ocean' SUVs in the United States and Europe.
The company's unit, Fisker Group Inc, filed for Chapter 11 bankruptcy, listing estimated assets in the range of US$500 million to $1 billion and liabilities in the range of $100 million to $500 million.
The termination of talks with a large automaker led Fisker to search for strategic options, including in- or out-of-court restructurings and capital markets transactions, the startup had said earlier this year.
While Fisker has not named the company, Reuters had reported that Japanese automaker Nissan was in advanced talks to invest in the startup.
The company, founded by automotive designer Henrik Fisker, flagged doubts about its ability to remain in business back in February and had paused investments into future projects until it secured a partnership with an automaker.
Tight access to capital in a high interest rate economy, costs associated with marketing and distributing its vehicles and slower-than-expected EV demand dragged the company's cash reserves lower.
Weak demand growth for EVs has particularly hit startups like Fisker at a time when rivals cut jobs and delay expansion plans to conserve cash.
Fisker has struggled with with production issues and technical glitches and last year lowered its production guidance. The company follows a handful of other EV startups into bankruptcy including Charge Enterprises, which installs EV charging stations, which filed for Chapter 11 protection in March. EV makers Lordstown Motors and Proterra filed bankruptcy last year.
The bankruptcy comes as EV makers struggle to adapt to slowing sales in the US and Europe and waning consumer demand. Although enthusiasm for EV remains strong, nearly 60% of global EV sales in 2024 will be in China, BloombergNEF said in a January report.