A Desperate Bid to Survive

Electric vehicle (EV) manufacturer Fisker Inc. is closing its Manhattan Beach headquarters and relocating employees to La Palma, Orange County, as part of an effort to stave off bankruptcy. This move is coupled with a $3.5 million short-term loan to keep the company afloat while it seeks potential acquisition or strategic alternatives, reports the Los Angeles Times.

The Financial Fallout

Fisker’s financial troubles began in March when a proposed alliance with a major automaker fell through, costing the company $150 million in potential financing. This collapse led to a sharp decline in Fisker’s share value, resulting in delisting from the New York Stock Exchange and breaching another debt agreement.

Relocation and Workforce Reduction

As of mid-April, Fisker employed about 1,135 people, following a 15% workforce reduction. The closure of the 72,000-square-foot Manhattan Beach office will consolidate operations in La Palma, where Fisker has an engineering and distribution facility. The aim is to cut costs and streamline operations.

A Lifeline Amidst the Struggle

Despite its financial woes, Fisker has secured a $3.5 million loan, potentially increasing to $7.5 million. This short-term funding is crucial as the company continues to sell its midsize Ocean SUV. The Ocean, although praised for its design and eco-friendly features, has faced criticism for software issues.

The Ocean’s Challenges

The National Highway Traffic Safety Administration (NHTSA) has launched four investigations into the Ocean SUV. Issues include the automatic emergency braking system activating unexpectedly, a door that won’t open, and loss of braking performance. Fisker is cooperating with regulators to resolve these problems.

Expansion Efforts and Price Cuts

To bolster its sales network, Fisker has added three new dealerships in California and New Jersey. This expansion comes after a failed attempt to sell directly to consumers, a model successfully employed by Tesla. In a bid to attract more customers, Fisker slashed prices on its 2023 Ocean models by over 30%.

Production Pauses and Market Struggles

Fisker paused production at its Austrian manufacturing plant, which produced around 10,200 Oceans last year. The company is not alone in facing industry challenges; Rivian Automotive, another EV startup, announced layoffs and significant value loss due to a slow domestic market and rising interest rates.

A Vision Inspired by California

Founded in 2016 by renowned car designer Henrik Fisker, the company aimed to revolutionize the EV market with the Ocean SUV. Inspired by California, the Ocean features a solar roof, recycled plastic interior, and a rear window designed for surfboards.

EVXL’s Take

Fisker’s journey reflects the broader challenges faced by EV startups in a competitive and volatile market. The push for innovation, such as Fisker’s eco-friendly designs, must be matched with robust financial and operational strategies. The EV industry’s potential remains vast, but companies must navigate financial turbulence to achieve lasting success. Fisker’s struggle underscores the need for sustainable business models in the green technology sector.