Fisker Files for Bankruptcy after Talks with Nissan Collapse

Fisker, the American electric vehicle (EV) maker, has filed for bankruptcy protection, precipitated by the collapse of deal talks with what the company describes as a "large automaker". The company's unit, Fisker Group Inc, has filed for Chapter 11 bankruptcy, listing estimated assets ranging from $500 million to $1 billion and liabilities ranging from $100 million to $500 million.

The talks reportedly held with Japanese automaker, Nissan, for investment in the startup fell through, exposing the company to the fallout of its rapid cash burn in the production and delivery of its "Ocean" SUVs in the US and Europe. This comes after the company paused investments into future projects until it secured partnership with an automaker, due to doubts about its ability to remain in business.

Access to capital in a high-interest rate economy, the costs associated with marketing and distributing its vehicle, and slower-than-expected EV demand have dragged the company's cash reserves low. EV makers as a whole are struggling to adapt to slowing sales in the US and Europe and waning consumer demand, with 60% of global EV sales in 2024 projected to be in China.

Fisker is just one of many EV startups that have filed for bankruptcy recently, including Charge Enterprises, which installs EV charging stations, and last year, Lordstown Motors and Proterra. The bankruptcy reflects the challenges faced by EV companies in today's increasingly competitive and saturated markets.

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