Fisker files for bankruptcy as US electric car maker hits wall

Fisker files for bankruptcy as US electric car maker hits wall

Fisker files for bankruptcy as US electric car maker hits wall

Photo: Fisker launched its first electric car last year, but sales were poor. \Internet photo

Fisker, an American electric car startup, filed for bankruptcy on the 17th, mainly due to a broken capital chain. In the past two years, many ambitious American electric car startups have hit a wall one after another and declared bankruptcy due to reduced market demand, financing difficulties, unstable supply chains and other issues. US media pointed out that in the US market, electric cars have no price advantage over traditional fuel cars, and the number of supporting facilities such as charging piles is insufficient, which has dampened consumer enthusiasm. Under this circumstance, the US government has also implemented discriminatory trade policies against Chinese electric cars, disrupting the supply chain of US automakers and causing costs to rise.

On the 18th local time, Fisker, an American electric car startup, filed for bankruptcy protection in Delaware, seeking to sell assets and restructure debts. According to estimates, the company’s assets are worth about $500 million to $1 billion, with debts of $100 million to $500 million. Its largest creditors include Adobe, Google, and German software company SAP. The company hopes to reduce costs and quickly enter the electric car market by outsourcing production, but negotiations on potential investment and joint manufacturing agreements with automaker Nissan failed in March this year, and it eventually declared bankruptcy due to the depletion of cash reserves.

US electric vehicles are expensive and lack supporting facilities

Fisker was once called a challenger to Tesla. It was founded by Henrik Fisker, who was a design consultant for Tesla. It is headquartered in California. It went public in 2020 through a merger with a special purpose acquisition company (SPAC). It began delivering its first electric car, the Ocean SUV, last summer. However, the hardware and software of this electric car have defects, and it has been investigated by regulators for problems with functions such as braking, switching parking mode, and opening and closing doors. About 10,000 Ocean SUVs were produced last year, but less than half were delivered. Fisker had to stop imitating Tesla’s direct sales model and switched to cooperating with dealers in the United States and Europe in January this year, but it still failed to achieve the goal of clearing inventory.

Fisker’s first electric car company, called Fisker Automotive, went bankrupt in 2013 due to the financial crisis and battery problems. Now, his second electric car company has made the same mistake. In recent years, many American electric car companies have tried to subvert the traditional auto industry, but have hit a wall. On August 7 last year, California-based electric bus manufacturer Proterra filed for bankruptcy protection because the company faced “market and macroeconomic headwinds.” In June last year, Lordstown, an electric light truck manufacturer based in Ohio, also filed for bankruptcy protection.

The Wall Street Journal pointed out that when Fisker launched its first electric car, the electric car market in the United States had begun to cool down, and there were signs that consumer demand was lower than expected. According to the New York Times, 269,000 electric cars were sold in the United States in the first quarter of this year, an increase of only 2.6% over the same period last year, while sales of traditional cars and light trucks increased by more than 5% to 3.8 million.

The New York Times said that American consumers are not very enthusiastic about electric vehicles, mainly because electric vehicles are expensive and there are not enough supporting facilities such as charging stations, which have no advantages over traditional fuel vehicles. In this environment, even large automakers are in trouble. In the first quarter of this year, Ford’s electric vehicle division lost $1.3 billion. Ford and GM have decided to slow down the production of electric vehicles and postpone the launch of new models.

Discriminatory trade policies drive up costs

The Biden administration has implemented discriminatory trade policies against China, further increasing the cost of manufacturing electric vehicles in the United States and undermining consumers’ willingness to buy. The Inflation Reduction Act introduced by the Biden administration in 2022 stipulates that only electric vehicles assembled in North America can receive federal tax credits. In May this year, the Biden administration announced a substantial increase in tariffs on electric vehicles and other goods imported from China.

Given that mining, refining and parts manufacturing related to electric vehicle battery production are mostly carried out in China, American automakers have to readjust their supply chain structure, resulting in rising costs. According to Boston Consulting Group, American consumers want to buy electric vehicles that cost no more than $50,000, but at the current production cost, even with tax incentives, this price will cause automakers to lose money.

source: china