Fisker said it would be the next Apple. Instead it joins the ash heap of EV history for the second time. Also, Titan Solar goes under, one of 16 solar bankruptcies in 2023 and 2024.
The Wall Street Journal reports Electric-Vehicle Startup Fisker Files for Bankruptcy … Again.
Fisker is the latest among a crop of once-highflying EV startups that looked to upend the traditional auto industry but have run out of charge. Pickup maker Lordstown Motors and bus manufacturer Arrival both filed for bankruptcy protection. Others are cutting costs or delaying investments, in an effort to conserve their remaining cash.
Fisker last summer started delivering its first electric model, the Ocean SUV, just as the previously hot market for battery-powered vehicles was starting to cool and signs were emerging that consumer demand for EVs was shallower than expected.
The company’s current challenges underline the hurdles facing young carmakers that have sought to emulate Tesla’s success. Many of them raised billions of dollars from investors in splashy public debuts but ran down their cash reserves as they spent heavily to develop new models and build out factories and sales centers, all while losing money on every vehicle sale.
Fisker had pitched itself as the automotive equivalent to Apple, which pays outside companies to build its products. Fisker sought to distinguish itself from more traditional carmakers by attempting to buy more of its hardware off-the-shelf and use software features as a way to set the Ocean apart from other EVs.
Fisker has said he tried to learn from the mistakes made during his first foray. He raised more money than the first time and partnered with reputable suppliers, including contract manufacturer Magna Steyr and Chinese EV battery giant Contemporary Amperex Technology.
Fisker ended 2023 having produced over 10,000 Oceans but only managed to deliver around 4,900 to customers.
What Went Wrong?
Unlike Ford, GM, and the other major producers, Fisker has no internal combustion engine (ICE) vehicles that make a profit to offset loses.
Interest rates have surged and junk rates even more.
Fisker lost about $150,000 per vehicle last year. 10,000 produced * $150,000 loss per vehicle is $1.5 billion.
Ultimately, what really went wrong is that demand levels are so small, it’s not possible for a startup to make money.
Musk was able to raise money but he also had carbon tax credits, personal charisma, and cheap interest rates.
If you were one of the unlucky buyers of the Ocean electric, good luck getting parts.
The WSJ comments “Fisker’s flop is another illustration that government industrial policy creates more losers than winners.”
Another Solar Company Goes Bust
Please consider Another Solar Company Goes Bust
Titan Solar, which installed thousands of systems across the U.S., informed its employees June 13 that it was “closing its doors,” having failed to secure a buyer for the company, according to an email obtained by TIME. In the email, Titan said that it had helped over 100,000 households go solar.
Titan is not the only solar installer to close up shop lately. The company, which could not be reached for comment for this story—its website has shut down—is one of 16 major solar outfits that have filed for bankruptcy in 2023 and 2024, according to Solar Insure, which offers warranties and monitoring for homeowners who have solar. They include Pink Energy and Vision Solar, which like other operators in the industry faced regulatory action and numerous consumer complaints. Customers are left with solar panels on their homes that they may or may not want. Some are working with lenders to find another company to take over the maintenance of their panels; others are just trying to get out of the loans.
In December, SunPower said there was “substantial doubt” about its ability to continue to operate. Sunlight Financial, which provided financing for residential solar, filed for bankruptcy last October. SunRun, one of the biggest residential installers in the country, has seen its share price plummet 87% from its 2020 peak; the share price of Sunnova, another national installer, has fallen 88%.
The Nevada State Contractors Board had put Titan on probation in 2023 after receiving multiple customer complaints. The company faces multiple lawsuits. In one complaint, filed in Ohio on June 13, a consumer named Thomas Jones alleges that a Titan salesman told Jones that he would have no electricity bill if he installed solar panels because of a free government program. The salesman then allegedly forged Jones’ signature on loan documents, taking out a $69,000 loan from another company without Jones’ knowledge. The loan included a finance charge of $75,000, meaning payments would add up to $166,422.80, according to the complaint. The salesman allegedly avoided scrutiny by sending the contract to an email address that was similar to Jones’, but was not his.
Free government money inevitably leads to corruption, fraud, and bankruptcies.