Fisker Inc., the troubled electric vehicle startup, has continued its downward spiral with price cuts of nearly 40 percent on one trim of its lone model, the Ocean.
The company’s latest move comes after a steady barrage of setbacks, including the dissolution of talks with a large automaker for a financial lifeline, halted production and a scathing report from Consumer Reports.
Fisker once claimed that it would produce a “mass-market, affordable electric vehicle” with longer range than competitors.
On Wednesday, Fisker cut prices 39 percent on the costliest trim, the Ocean Extreme, a drop of $24,000. That vehicle now has a sticker price of $39,799 including the maximum destination fees.
The company reported this month that it had “substantial doubt about Fisker’s ability to continue as a going concern” after reporting a net loss of $463.6 million for the fourth quarter of 2023. The startup has been plagued by software issues and badly damaged by a too-little-too-late switch to dealer sales after it struggled to fund a direct-sales model.
“Interest rates went up, the stock market and investor interest in startup automakers … essentially completely evaporated,” said Sam Abuelsamid, principal analyst for e-mobility at Guidehouse Insights. “There was no way for Fisker to raise the money that they needed to actually build out a distribution network.”
Its troubles mark a notable decline for an automaker that has been tied to industry giants Magna Steyr and Caterpillar. If Fisker files for bankruptcy, it would be the latest in a slew of recent electric vehicle startup defeats, including Lordstown Motors, which filed for bankruptcy last year, and Arrival, which filed for bankruptcy in February. It would also become the second failed automotive venture of co-founder Henrik Fisker.
The company’s deterioration solidifies a truth plain to investors and consumers alike: The EV startup boom, once propped up by a frothy capital market and starry-eyed adoption targets, is over.
Fisker went public in 2020 through a merger with a special purpose acquisition company, part of a flurry of 2020 and 2021 SPAC deals, and had a valuation of $2.9 billion. The company’s shares have lost about 98 percent of their value over the last year.
On Monday, Fisker announced that a potential rescue from a large automaker, reportedly Nissan, had collapsed. Shares in Fisker plunged and trading was halted.
Fisker has been building the Ocean, an electric crossover, with Magna Steyr in Austria, but it had delivered only 4,700 vehicles at the end of last year and an additional 1,300 through March 15. The company reported on March 18 that it had 4,700 more vehicles in inventory worth over $200 million.
Fisker paused production this month after it failed to make a required interest payment of about $8.4 million. It had already announced plans to cut 15 percent of its workforce.
Before founding Fisker Inc., Henrik Fisker launched Fisker Automotive in 2007. It was dogged by production delays, recalls and other issues and declared bankruptcy in 2013.
Fisker’s second coming was beset by production problems and worrying software issues. Owners complained that their vehicles experienced loss of power, braking problems, defective key fobs and faulty seat sensors.
“The space is super competitive,” as Tesla and traditional automakers fight for EV sales, said Stephanie Brinley, an analyst at S&P Global Mobility. “Simply being an EV is not enough to be successful.”
Fisker pivoted to dealer sales and service in January after trying to emulate U.S. EV sales leader Tesla with a direct-to-consumer sales model.
The company also failed to produce a model that met market expectations.
A Consumer Reports review slammed the Ocean’s spotty safety feature delivery as “inexcusable” in a review this month.