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Fisker Faces Mass Cancellations as Financial Struggles Mount

Fisker Faces Mass Cancellations as Financial Struggles Mount

March 28, 2024 By Peter Leave a Comment

Tens of thousands of Fisker customers have canceled their vehicle reservations, according to leaked data obtained by Business Insider, as the electric car company scrambles to find additional financing and a potential bankruptcy filing looms over its operations.

High Volume of Cancellations

More than 40,000 out of well over 70,000 reservations for the Fisker Ocean have been canceled to date, according to internal company metrics viewed by Business Insider. The company first began accepting pre-orders in November 2019 and announced in February 2023 that it had "approximately 65,000" reservations ahead of its first deliveries. Fisker was averaging around 70 to 80 cancellations per day in a recent seven-day average, according to the internal metrics viewed by BI.

Implications of Cancellations

The reservation cancellations pose an issue for the company, representing potential sales slipping away during a time when the company desperately needs to generate more revenue. The cancellations also represent a drag on company costs. While it costs $250 to reserve a Fisker, that amount is refundable aside from a $25 processing fee, the company's website says.

Financial Challenges and Strategic Moves

Fisker has delivered more than 6,000 of the vehicles to date since the automaker released the Fisker Ocean SUV in June 2023. Fisker confirmed the deliveries but declined to comment on cancellations of reservations or orders. The automaker dropped prices for its flagship EV by 39% on Wednesday in an apparent attempt to boost sales — meaning the most affordable version of the SUV is now selling for about $25,000.

During Fisker's last earnings call in February, it warned that the company might not have enough funds to survive 2024. The company said it had paused production of its electric car for six weeks and had around $121 million in the bank as of March 15. On March 18, the company said it had secured a commitment for up to $150 million in additional financing from an existing investor.

Strategic Alternatives and Past History

On March 22, Fisker said in a regulatory filing that negotiations with a major automaker had failed and that Fisker was continuing to evaluate strategic alternatives. The end of negotiations with the major automaker meant that Fisker was unable to meet a closing condition with the existing investor for the up to $150 million of financing previously announced.

The company is Henrik Fisker's second automotive startup. The Fisker CEO and Danish car designer's previous startup, Fisker Automotive, filed for bankruptcy protection in 2013. Fisker launched his second automotive company in 2016.

—————————————————————————————————————————————
By: gkay@insider.com (Grace Kay)
Title: Fisker Faces Mass Cancellations as Financial Struggles Mount
Sourced From: www.businessinsider.com/fisker-ocean-reservation-cancellations-electric-car-leaked-data-2024-3
Published Date: Thu, 28 Mar 2024 23:48:05 +0000

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