Source: Wall Street See

One person can work for two auto companies, and was once the highly anticipated newcomer in the electric car industry.$Fisker (FSRN.US)$After applying for bankruptcy just one year after releasing their first car model, this is already the second business failure for Fisker's CEO, Henrik Fisker.

Before entering the auto industry, Henrik Fisker was a well-known designer in the industry, with a brilliant track record at BMW and Aston Martin. In 2007, he launched the Fisker Automotive brand, which ended in bankruptcy in 2013.

With the intense competition in the electric vehicle market and signs of insufficient demand from American consumers, Fisker announced its bankruptcy this week after being delisted from NYSE in April.

In the IPO, Fisker raised billions of dollars from investors, but due to large-scale investment in new car models, research and development, factory and sales network construction, and loss-making on each car, the cash reserves were quickly depleted.

Earlier this year, Fisker shifted from a direct-to-consumer sales model to a dealer model, but failed to ignite sales performance and is still stuck with thousands of unsold cars.

Second entrepreneurial endeavor

Fisker positions itself as the "Apple" of the automotive industry, relying on outsourcing companies for production and having imitated Tesla, it also claimed to enter the Chinese market.

Fisker's first car model, the Ocean SUV, has an claimed range of 360 miles per single charge and has won awards for its design. It is priced at less than $40,000, but has been criticized for software problems.

The United States National Highway Traffic Safety Administration has been investigating reports from customers about slipping or declining braking performance of the Ocean SUV. Fisker responded that the brake problem has been resolved through a software upgrade and that the company is fully cooperating with the NHTSA's investigation.

Henrik Fisker's previous car company also filed for bankruptcy shortly after launching its first hybrid car, the Fisker Karma, priced at $100,000.

Fisker said he had learned from his first entrepreneurial endeavor. This time he raised more funds and established partnerships with well-known suppliers such as contract factory Magna Steyr and battery giant Contemporary Amperex Technology. But ultimately, the company's main problems stemmed from internal organizational mistakes, particularly in its finance and accounting departments.

Disintegration

Fisker's bankruptcy application was the result of turmoil caused by quality issues with its first car model, the Ocean, which was criticized by many customers and critics. The company also failed to submit financial reports to regulators on time multiple times, resulting in the loss of several high-level executives. Two chief financial officers resigned within a month.

Former CFO Geeta Gupta-Fisker has said that as the company's car production began, its financial complexity increased day by day, but the strength of the financial team did not increase in sync. Fisker produces cars in Europe and sells them in the United States, a process that takes more than a month, causing some buyers to have to wait for delivery.

As of the end of 2023, the company has produced over 10,000 Oceans, but has delivered only about 4,900.

In order to speed up vehicle delivery, Fisker decided to switch to a traditional dealer model.

In late February, Fisker issued a warning of ongoing business concerns, acknowledging the risk of running out of funds this year.

The following month, Fisker announced a six-week suspension of Ocean production and negotiations with a major carmaker on cooperative production matters failed. NYSE notified Fisker to revoke its listing qualification due to unusually low stock prices ($0.09).

In early April, Fisker appointed a restructuring expert to its board and said it was exploring various strategic options such as restructuring and asset sales. At the time, Fisker had only about $50 million in cash reserves and began laying off employees, closing stores and warehouses.

Editor/tolk