A California electric vehicle maker once worth $8 billion has been given the option to sell its cars at a huge discount because it is desperate to raise cash.
Fisker is the second carmaker from famed car designer Henrik Fisker to file for bankruptcy protection. Fisker filed for bankruptcy protection last month after its attempts to find a buyer failed.
The CEO and his wife voluntarily reduced their salaries to cut costs; Henrik reduced his salary from $62,400 to just $1, plus a bonus of $710,000. The company’s share price has fallen 85 percent in the past month alone.
In recent weeks, the company asked a federal bankruptcy court judge to allow it to sell its fleet to American Lease, which provides cars to Uber drivers in the New York City area.
That request was granted and they will now begin the process of selling more than 3,000 of their Ocean SUVs for approximately $46.25 million, a huge discount rate.
Fisker is the second carmaker from famed car designer Henrik Fisker to file for bankruptcy protection. Fisker filed for bankruptcy protection last month after attempts to find a buyer failed.
The company’s share price has fallen 85 percent in the past month alone.
American Lease was the only dealer among the “hundreds” that agreed to buy the fleet, according to Technological crisis.
The outlook was bleak as the company had to wait for most vehicles to pass inspection.
The company can now move forward with bankruptcy hearings as a significant portion of its business has been liquidated.
Henrik Fisker, who helped design the popular Tesla Model S, founded the company as an affordable alternative to the electric vehicle market in 2017.
Fisker, a designer, is also known for leading the development of the BMW Z8 sports car.
It had ambitious plans, including a flagship EV SUV called Ocean, which would launch in June 2023 and cost more than $38,000.
However, attempts to outsource production quickly ran into obstacles and Fisker had to contend with parts shortages.
At one point, the automaker had to disassemble parts from Fisker and his wife’s cars to make repairs to the first batch of Oceans.
Henrik Fisker, chief executive of the eponymous car company, has cut his salary to just $1 to help cover the cost of bankruptcy proceedings.
However, the problems extended beyond production, as 14 complaints were filed with the National Highway Traffic Safety Administration (NHTSA) about vehicle doors that would not open.
Worryingly, some of the reports claimed that the emergency override failed to release the door. Values.io reports.
The NHSTA will conduct a preliminary evaluation, which will be the third case opened against Fisker.
The struggling company faced a further setback when popular car critic Marques Brownlee, who is behind the YouTube channel MKBHD, called the Ocean ‘‘The worst car I have ever reviewed.’
He complained of problems with the car’s software and claimed Fisker tried to delay delivery of a vehicle for review until it issued a new update.
Brownlee ended up borrowing one of the cars from another dealer, but was not impressed.
“Don’t buy this version of the Fisker Ocean,” he urged his 18.6 million subscribers.
In response, Fisker told the media that the issues detected had predominantly been found in previous models and that the company is continuously working to fix them and update features.
Chief Operating Officer Geeta Fisker and Chief Executive Officer Henrik Fisker, husband and wife, left, have voluntarily reduced their salaries.
But Brownlee’s video reached five million views and preceded a sharp drop in Fisker’s shares.
Sales of the Ocean have stagnated as Fisker has missed its own sales targets. In March, it announced it would cut the retail price of its 2023 Ocean Extreme by $24,000.
“We recognize that the industry has entered a turbulent and unpredictable period,” Fisker said in a statement at the time.
With that understanding and taking into account the lessons learned in 2023, we have put in place a plan to optimize the business as we prepare for another difficult year.
The company now hopes to offload its 3,300 unsold Oceans to ride-hailing apps like Uber and Lyft for 80 percent below market value.
Falling share prices have forced the NYSE, the world’s largest stock exchange, to delist Fisker for failing to comply with regulations.
The company was delisted due to “abnormally low” price levels, which caused its shares to trade for less than a dollar.
Over the past month, the company’s shares have plummeted by 94.9 percent. As of Wednesday morning, the company was worth less than $10 million.
The company has been beset by problems surrounding its electric SUV, the Ocean, which is due to launch in 2023.
Fisker is now trying to sell its assets to help cover bankruptcy costs.
In In February 2021, Fisker shares were trading at a high of $28, valuing the company at nearly $8 billion.
The delisting means the company must now immediately repay its debts due in 2025 and repurchase bonds due in 2026, according to a regulatory filing.
Fisker said in its filing with the Securities and Exchange Commission that it may not have “sufficient cash reserves or financing sources” to pay its debts.
DailyMail.com has contacted Fisker for comment.