Fisker in Crisis: 15% Layoffs and a Shift That Could Sink the EV Startup
Electric car maker Fisker is showing off its Ocean model at the Mobile World Congress mobile trade show shortly before the vehicle's launch. Photo: Andrej Sokolow/dpa (Photo by Andrej Sokolow/picture alliance via Getty Images)
Fisker Struggles: Layoffs, Cash Concerns, and Uncertain Future
Electric vehicle (EV) startup Fisker faces a critical juncture. The company announced plans to cut 15% of its workforce due to a cash shortage that threatens its ability to operate for the next year. This comes amidst a strategic shift from direct sales to a dealership model and ongoing challenges with its first vehicle, the Ocean SUV.
Financial Woes and Funding Hunt
Fisker’s cash reserves, while at $396 million, are insufficient. With $70 million restricted, the company is actively seeking additional funding. Talks are underway with a lender for an “additional investment” and a potential partnership with a major automaker is being explored. This partnership could be a lifeline, providing crucial investment, co-development of EV platforms, and North American manufacturing.
Shifting Gears and Inventory Woes
The transition to a dealership model has been bumpy. Fisker acknowledges a “negative impact” on sales and currently holds significant unsold inventory. While interest from dealerships exists, securing partnerships has been slow, with only 13 signed on out of a targeted 250.
Ocean SUV Issues and Safety Concerns
Adding to the company’s woes are ongoing problems with the Ocean SUV. Software updates haven’t fully addressed reported issues, and the National Highway Traffic Safety Administration (NHTSA) is investigating potential safety hazards, including sudden brake failures and vehicle rollovers.
Uncertain Future for New Models
The funding shortage has a ripple effect. Fisker has halted further investment in future models unless a partnership is secured. This casts doubt on the future of the teased pickup truck, compact EV, and other Fisker vehicles.
Fisker’s future hinges on successfully navigating these challenges. Securing additional funding and a strong partnership are crucial, as is resolving production issues and ensuring the Ocean SUV’s safety. Only time will tell if Fisker can weather this storm and establish itself as a viable player in the competitive EV market.
