As the Biden administration continues is war on fossil fuels and pushing “green” energy alternatives, yet another electric vehicle (EV) maker is seeking bankruptcy protection.

Fisker filed for bankruptcy protection late Monday and will seek to salvage its operations by selling assets and restructuring its debt. The move comes after the company burned through cash while trying to increase production of its Ocean SUVs, CNBC reported. The highly competitive electric vehicle (EV) market has witnessed several companies, such as Proterra, Lordstown, and Electric Last Mile Solutions, filing for bankruptcy in the last two years. They struggled with declining demand, difficulties in fundraising, and operational challenges stemming from global supply chain issues.

The company, founded by automotive designer Henrik Fisker, expressed uncertainty about its ability to continue operations in February. Following this, it failed to secure an investment from a major automaker, leading to operational cutbacks. The breakdown of talks with the automaker—reportedly Nissan, according to Reuters—resulted in the loss of a $350 million investment from an undisclosed investor, which was contingent on the automaker’s participation. Consequently, Fisker was forced to explore alternative options, CNBC added.

“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently,” Fisker said. In its Chapter 11 bankruptcy filing in Delaware, Fisker Group Inc.’s operating unit estimated its assets to be between $500 million and $1 billion and its liabilities to be between $100 million and $500 million.

CNBC added:

Fisker went public in late 2020 in a merger with a blank-check firm, valuing it at $2.9 billion and infusing its balance sheet with more than $1 billion in cash.

The listing was a second chance for its Danish CEO and founder to build an auto business after his first venture, Fisker Automotive, filed for bankruptcy in 2013, falling victim to the 2008 financial crisis and a battery failure in the Karma hybrid sedan that had led to a substantial recall.

Henrik Fisker – a former design consultant for Tesla – had said at the time of the listing that Fisker wanted to be the Apple of the auto industry by outsourcing manufacturing of its cars.

The “asset light model” was meant to reduce development times for vehicles and lower costs to take a vehicle to the market.

Its Ocean SUV, however, was wrought with software and hardware issues, with Consumer Reports, an influential non-profit, calling the vehicle “unfinished business.”

The car is currently under regulatory investigation for braking issues, problems with shifting into park and other modes, and occasional failure of doors to open. Fisker delivered only a fraction of the more than 10,000 vehicles it produced last year. In January, the company switched to a dealership-based distribution model, moving away from the direct-to-consumer approach Tesla had pioneered.

It had signed agreements for 15 dealer locations in the U.S. and 12 partners in Europe but still failed to clear its inventory of more than 5,000 cars. “After evaluating all options for our business, we determined that proceeding with a sale of our assets under Chapter 11 is the most viable path forward for the company,” Fisker said on Tuesday.

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