Fisker halts production with only $121 million in the bank

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EV startup Fisker is halting production of its electric Ocean SUV for six weeks as it struggles to raise cash.

The company said in a regulatory filing Monday morning that it had only $121 million in cash and cash equivalents as of March 15, $32 million of which is restricted or not immediately accessible. Fisker also said Monday that its accounts payable balance is up to $182 million and there is “substantial doubt” that it can continue operations without raising new capital, issuing such a warning after saying in February that it could .

The filing comes at a troubling moment for the startup, which went public in 2020 when it merged with a special purpose acquisition company. Fisker had started shipping the Ocean SUV in the US and Europe in mid-2023, but the rollout has been hampered by problematic software and weak customer service, TechCrunch recently reported. The National Highway Traffic Safety Administration is investigating Ocean for rollaway problems and braking system issues. Last month, Fisker announced it was laying off 15% of its workforce, or about 200 people.

Fisker plans to ship about 5,000 of the 10,000 cars produced by its contract manufacturing partner Magna Steyr in 2023. It is currently trying to move away from the direct sales model in favor of dealer partnerships, although at least one of the first dozen or so initial dealer partners has already moved away from the startup. The Wall Street Journal reported last week that it has hired restructuring advisers to evaluate a potential bankruptcy filing. The company said on Monday that it delivered 1,300 vehicles in January and February.

Relief may be difficult to find. Automotive manufacturing is incredibly expensive, even for a company like Fisker that is outsourcing most of the work to suppliers like Magna. Fisker ended 2023 with $326 million in cash, and even though Magna produced zero cars in January and only 1,000 cars since Feb. 1 — figures Fisker shared for the first time Monday morning — it still made $11,000 last year. Its cash reserves decreased by about $200 million in a week.

Fisker said on Monday that it is in talks about a possible partnership with an automaker that could bring investment – ​​Reuters has reported that the automaker is Nissan – and announced on Monday that in the near term it would look to expand sales through Is trying to raise $150 million from. of convertible notes. But the deal with an unnamed investor is not final and the funds will be released in tranches of $35 million subject to a number of conditions.

At the same time, the fixer announced it had been late to filing its annual results for 2023, including the SEC’s 15-day extension period that was set to expire on March 15. This triggered a default on one of the company’s other convertible notes. While Fisker says the investor behind those notes has waived the default, the company says investors can still convert the balance on the notes — which totaled more than $300 million as of the end of January — into shares .



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