Fisker announced a six-week halt to the production of its electric Ocean SUV, as the company’s financial woes continue to worsen.
On Monday Fisker revealed in a regulatory filing that it had only $121 million in cash and equivalents as of mid-March, with a considerable portion of that amount restricted or not readily accessible. This financial strain is further exacerbated by an outstanding accounts payable balance that exceed their cash on hand of $182 million, casting “substantial doubt” on the company’s ability to continue operations without securing new capital.
To make matters worse, Fisker disclosed it had missed an $8.4 million interest payment on its unsecured convertible notes, a clear indicator of its liquidity crisis.
In an effort to navigate through these financial troubles, the company announced plans to raise up to $150 million through the sale of convertible notes, and that it remains in negotiations with a prominent automaker, believed to be Nissan, for a potential investment and partnership.
A partnership with Nissan could offer Fisker a lifeline, providing much-needed capital and strategic support to steer the company back towards stability.
This latest development follows a troublesome year for Fisker, marred by software issues, poor customer service, and multiple NHTSA safety investigations into the Ocean SUV. Not helping matters, notable YouTuber Marques Brownlee (MKBHD) called the Ocean the worst car he has ever reviewed.
Fisker was hoping for brisk sales, building 10,193 vehicles through its contract manufacturer, Magna Steyr, in 2023. However, the company had trouble finding buyers for the Ocean SUV, selling only 4,929 of them, leaving Fisker with a significant inventory of unsold vehicles across North America and Europe.
In an effort to stem the tide, the company moved to dealer partnerships in addition to their direct sales model. However, that hasn’t made a impact on their bottom line, with Fisker reportedly taking the first steps towards a bankruptcy filing last week.
Fisker stock (FSR) has dropped more than 13% on Monday, and is now trading at just $0.15 per share.
