EV startup Fisker is halting production of its Ocean electric SUV for six weeks as it tries to raise money.
The company announced Monday morning regulatory filing that it had just $121 million in cash and cash equivalents as of March 15, of which $32 million is restricted or not immediately accessible. Fisker also said on Monday that its accounts payable balance is $182 million and that there is “substantial doubt” that it can continue as a going concern without raising new capital, after saying in February that it was likely to issue such a warning .
The filing comes at a troubled time for the startup, which went public in 2020 when it merged with a special-purpose buyout firm. Fisker started shipping the Ocean SUV in the US and Europe in mid-2023, but the launch has been plagued by problematic software and lackluster customer service, as TechCrunch recently reported. The National Highway Traffic Safety Administration is investigating the Ocean for rollover problems and issues with the braking system. Fisker announced in February that it was laying off 15 percent of its workforce, or about 200 people.
Fisker finished 2023 having shipped about 5,000 of the 10,000 cars produced by its contract manufacturing partner, Magna Steyr. The company said Monday it delivered 1,300 vehicles in January and February and still has about 5,000 in inventory in the U.S. and Europe.
It’s currently trying to move away from a direct sales model in favor of dealer partnerships, though at least one of its first dozen or so dealer partners has already left the startup. The Wall Street Journal reported last week that it has hired restructuring consultants to evaluate one possible bankruptcy filing.
Relief can be hard to come by. Building cars is incredibly expensive, even for a company like Fisker, which outsources much of the work to suppliers like Magna. Fisker ended 2023 with $326 million in cash, and even though Magna produced zero cars in January and only 1,000 as of Feb. 1 — data Fisker first shared Monday morning — it was still running out of inventory by about $200 million in the last 11 weeks.
Fisker said Monday it remains in talks with an automaker about a potential partnership that could bring an investment. Reuters has mentionted that this car manufacturer is Nissan. In the short term, Fisker said Monday it is trying to raise $150 million through the sale of convertible notes. This deal, with an undisclosed investor, is not final and the funds will be released in $35 million tranches subject to various conditions.
At the same time, Fisker announced it is delaying filing its 2023 annual results, including missing the 15-day SEC grace period that ended March 15. This has caused one of the company’s other convertible notes to default. While Fisker says the investor behind those notes has waived default, the investor can convert the amount remaining on the note — which at the end of January was more than $300 million — into shares.
