EV maker Fisker slashes prices as potential bankruptcy looms

Fortune· Michael Tullberg—Getty Images
David Meyer
3 min read
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Sometimes a bargain’s a bargain because it’s also a huge risk.

If you’ve been jonesing for a Fisker electric vehicle, now’s certainly the time to pick one up cheap. The company has slashed the price of its Ocean SUV, with the top-end Extreme model going for a mere $37,499, down 39% from $61,499. But these are, er, Extreme measures for Fisker that could presage the end of the company.

As Fortune’s Prarthana Prakash details in this piece out today, the New York Stock Exchange yesterday suspended trading in Fisker’s stock, after the company revealed the collapse of talks with an unnamed major automaker, reportedly Nissan. A delisting, which the NYSE is now planning due to “abnormally low” price levels—Fisker's share price has been below a dollar since January and was trading at 9 cents before the suspension—could very quickly push the firm into bankruptcy. As Fisker said in a Monday filing with the Securities and Exchange Commission), delisting would force it to offer to repurchase convertible notes, thus triggering a default as it doesn't have the cash to actually do this.

Fisker already paused production last week. The U.S. National Highway Traffic Safety Administration’s Office of Defects (must be a fun place to work) is looking into the Ocean’s apparent issues with “partial loss of braking over low traction surfaces, without alerting the driver.”

So, cheap Fisker, anyone?

Of course, it isn’t just Fisker that’s struggling in the EV market right now. Tesla just had to make the grim decision to trim its Chinese production due to slow growth—a problem that is by no means confined to Tesla’s Chinese operations. CEO Elon Musk now hopes to stimulate North American growth by forcing new Tesla owners to experience a test of the car’s “Full Self-Driving” technology, which still falls short of the promise implicit in its name, though Musk told staffers that “almost no one actually realizes how well (supervised) FSD actually works.”

Even Tesla’s nemesis, the market-leading BYD, is having issues. An earnings miss today knocked 6.1% off the Chinese superstar’s share price, even as it set out a 20% growth target for this year’s exports. BYD is slashing prices to tempt buyers away from rivals like Toyota and Volkswagen. Unlike with Fisker, this is a move born out of aggression rather than desperation. All this price-cutting certainly makes it hard to compete in such a turbulent EV scene, where sales are slowing around the world.

The big question is how long the turbulence will last because it will be temporary. The world simply has to stop burning fossil fuels—and yes, I know that’s probably the most complicated “simply” in existence. But global heating is accelerating and we just cannot rescue ourselves while also continuing to pump carbon into the atmosphere at anything like the rate we do now. The Biden administration certainly recognizes this, having last week laid out a timeline for phasing out gas-guzzlers within the next eight years, so by 2032 most new cars in the U.S. will have to be zero-carbon (there’s still some scope for hybrids, which is contentious in itself).

This reality dictates that the current EV slump will not persist. But that will be cold comfort to the players who can’t stay afloat. The U.K.’s Arrival already bit the dust last month, and Fisker would need a miracle to avoid the same fate. More news below.

David Meyer

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This story was originally featured on Fortune.com

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