Possible bankruptcy for EV maker Fisker as industry hit with declining consumer interest

Electric-vehicle startup Fisker may file for bankruptcy as the declining pace of consumer demand weighs upon the struggling company.

In a March 15 8-K filing with the Securities and Exchange Commission, the company warned investors that "Fisker did not make a required interest payment of approximately $8.4 million payable in cash on March 15, 2024 (the “Interest Payment”) with respect to Fisker’s unsecured 2.50% convertible notes" and that "the Company has a 30-day grace period to make the Interest Payment."

Fisker also said in the filing that the company's cash, cash equivalents and restricted cash was reduced to $120.9 million as of March 15, 2024, and the company expects "to require additional cash in 2024 for debt service and investment needs, and our ability to generate cash from operating activities will depend on our ability to transition to a dealer model and sell vehicles."

"Accordingly," the filing continued, "we have concluded there is substantial doubt as to our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to raise additional debt or equity financings, enter into a strategic partnership with an OEM, and generate cash from the sale of vehicles. We need significant additional funding in the near term to execute our business plan and to continue our operations."

Fisker reported in February it had $273 million in sales in 2023, with more than $1 billion in debt, and the company announced it was laying off 15% of its workforce. The company said that "the industry has entered a turbulent, and unpredictable period. With that understanding and taking the lessons learned from 2023, we have put a plan in place to streamline the company as we prepare for another difficult year."

The company announced in a press release that it has obtained "a financing commitment from an existing investor providing up to $150 million of gross proceeds," and that "Fisker will pause production for six weeks starting the week of March 18, 2024, to align inventory levels and progress strategic and financing initiatives."