Fisker Reaches Tentative Deal With American Lease to Sell Remaining Ocean SUVs For $46.25 Million

In the midst of its Chapter 11 bankruptcy proceedings, Fisker has struck a tentative agreement with American Lease, a New York-based firm specializing in leasing electric vehicles (EVs) to ride-share drivers, to buy all of the unsold Fisker Ocean SUVs.

The deal, which must be approved by the court by July 12, could see Fisker offloading its remaining inventory of Ocean SUVs for up to US$46.25 million. The proposed sale includes 3,231 Fisker Ocean SUVs, currently stored across various locations in the United States, a port in Belgium, and the factory in Austria where they were manufactured.

American Lease has agreed to pay between US$2,500 and US$16,500 per vehicle, depending on their condition. This price range is a steep discount from the original MSRP of US$38,999 to US$61,499. A few months ago Fisker slashed those prices by nearly 40% in an attempt to offload their inventory.

American Lease will pay top dollar—$16,500—for 2,711 vehicles in “good working order.” For 351 previously titled cars, the firm will shell out $3,200 each, while 141 damaged vehicles will fetch $2,500 apiece. Additionally, 28 “engineering” vehicles will be sold for $2,500 each, according to Car and Driver.

This potential purchase aims to provide the financially embattled EV startup with much-needed funds to cover immediate operational costs and repay creditors.

American Lease is eyeing this bulk purchase to expand its fleet of EVs in response to New York City’s mandate that all ride-share and taxi vehicles be electric by 2030. With a fleet of nearly 4,700 vehicles, none of which are EVs, the company faces a significant transition challenge. Acquiring Fisker’s inventory provides a cost-effective solution to begin this transition.

What’s In It For Fisker?

For Fisker, the deal represents a potential lifeline. The company has been scrambling to find buyers for its assets after attempts to sell the business to as many as 40 potential buyers failed. Slashing prices in March to stimulate sales didn’t yield sufficient results, leading to this desperate bulk sale strategy.

According to the filing, failure to close the deal by July 12 would leave Fisker unable to meet critical expenses such as payroll and taxes.

The proceeds from this sale will primarily go toward paying storage facilities holding the vehicles, which are owed approximately US$1.5 million. The remaining funds will be used to keep Fisker operational as it continues to restructure and pay down its significant debt, which includes US$190 million owed to its largest secured creditor, Heights Capital Management.

The Impact on Current Fisker Owners

Current Fisker Ocean owners face an uncertain future. Fisker has made it clear that it will not honour warranties or provide over-the-air (OTA) software updates post-sale. Additionally, there are no guarantees about the availability of spare parts. This lack of support raises concerns for owners regarding the long-term operability of their vehicles.

However, the agreement stipulates that Fisker will transfer its source code and proprietary software to American Lease, enabling the leasing firm to maintain and potentially update the vehicles. This move could also benefit existing owners if American Lease decides to sell parts or offer services to the broader Fisker community.

What’s Next for Fisker?

The deal is subject to court approval, and the outcome of the July 9 hearing will be crucial. If approved, the sale will not only provide immediate financial relief but will also set the stage for Fisker’s ongoing reorganization efforts. Nonetheless, the company’s future remains bleak. With a total debt nearing $1 billion, the $46.25 million from this sale is only a small fraction of what’s needed to secure long-term viability.

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