(ReclaimingAmerica.net) – Given the circumstances the car industry is facing at the moment, an electric vehicle (EV) manufacturer that has been having a tough time is suspending production as it prepares for bankruptcy.
Fisker Automotive announced that production will stop for six weeks “to align inventory levels and progress strategic and financing initiatives.” According to The Wall Street Journal, they hired some helpers last week to prepare for a possible bankruptcy.
Back in February, Fisker warned that it was at risk of running out of money this year and might not make it. They said they made about $273 million in sales while holding about $1 billion in debt.
Likewise, the car manufacturer said that it had arranged $150 million in financing from an investor.
This is not the first time Fisker has faced trouble. In 2013, the company went bankrupt even though the Obama administration gave them a $192 million loan guarantee. Afterward, a Chinese group bought them in 2014, and the cars cost from $30,000 to $385,000.
According to the WSJ, Fisker used to be popular with investors and electric car fans. However, they had problems building up the capacity to mass-manufacture vehicles, and the demand for electric cars was not growing as fast as expected.
Their stock has dropped about 90 % this year and now trades at about 15 % per share. A company spokesperson did not comment on bankruptcy rumors.
They referred to a statement in which the company expressed that it “often works with outside advisors to help manage its business and assist in developing and executing strategies” and is “focused on raising additional capital and engaging in a strategic partnership with a large automaker.”
As of March 15, Fisker had made 1,000 EVs and delivered 1,300 in 2024 but at the end of 2023, they still had 5,000 cars sitting around unsold.
Another spokesperson stated Fisker has altered its business model and engaged in talks with a large auto manufacturer about a potential transaction.
While Fisker might be in worse shape than other electric car companies, the whole industry is struggling. Even though the Biden administration is pushing for more electric cars, big companies like Ford are losing lots of money on them.
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