Electric vehicle startup Fisker has halted production of its Ocean SUV for six weeks as it seeks a cash infusion.
The company said in a regulatory filing Monday morning that it had just $121 million in cash and cash equivalents as of March 15, of which $32 million was restricted or not immediately accessible. Fisker also said on Monday that its accounts payable balance reached $182 million, and that there was “substantial doubt” it could continue operations without raising new capital, after saying in February that it would likely issue such a warning.
The filing comes at a worrying moment for the startup, which went public in 2020 when it merged with a special purpose acquisition company. Fisker began shipping the Ocean SUV in the U.S. and Europe in mid-2023, but the rollout has been plagued by problematic software and lackluster customer service, as TechCrunch recently reported. The National Highway Traffic Safety Administration is investigating the perimeter for rolling problems and braking system issues. Fisker announced in February that it would lay off 15% of its employees, or about 200 people.
Fisker ended 2023 having shipped nearly 5,000 of the 10,000 vehicles produced by its contract manufacturing partner, Magna Steyr. The company said on Monday that it delivered 1,300 vehicles in January and February.
It's currently trying to move away from the direct selling model in favor of merchant partnerships, although at least one of its first ten merchant partners has already moved away from the startup. The Wall Street Journal reported last week that it had hired restructuring advisers to evaluate a potential bankruptcy filing.
It may be difficult to get relief. Manufacturing cars is very expensive, even for a company like Fisker that outsources much of the work to suppliers like Magna. Fisker finished 2023 with $326 million in cash, and although Magna produced no cars in January and only 1,000 cars since February 1 — numbers Fisker first shared on Monday morning — it still depleted its cash reserves by about $200 million during The past 11. Weeks.
Fisker said Monday that it remains in negotiations with an automaker about a potential partnership that could bring investment. Reuters reported that this car maker is Nissan. In the near term, Fisker said Monday it is trying to raise $150 million through the sale of convertible securities. This deal, with an undisclosed investor, is not final and the funds will be released in tranches worth $35 million subject to a number of conditions.
At the same time, Fisker announced it was late filing its 2023 annual results, including missing a 15-day extension from the SEC that expired on March 15. This led to a default on one of the company's other convertible bonds. While Fisker says the investor behind these securities has waived default, the investor can still convert the remaining amount in the note — which as of late January was more than $300 million — into shares.
