After furloughing its US workers, Fisker Automotive has hired a law firm for a potential bankruptcy, Reuters reports, citing a person familiar with the process.

Kirkland & Ellis is advising the California-based maker of the extended-range plug-in Karma for a potential bankruptcy filing, which hasn't produced a car in about eight months and is losing interest from two prospective China-based buyers. Fisker declined to comment to Reuters.

Fisker, which has raised $1.2 billion in equity, has also had about $336 million of its $529 million line of credit with the feds frozen because of its failure to meet certain production mandates. Meanwhile, China-based companies Dongfeng Motor Group and Zhejiang Geely Holding Group have stepped away from a potential acquisition because of Fisker's loan terms with the feds. One payment on the loan is due in April.

In March, co-founder and namesake Henrik Fisker resigned as executive chairman of the company. Mr. Fisker and Fisker CEO Tony Posawatz were believed to have disagreed over whether the company could feasibly grow with its current cash situation.


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    • 1 Second Ago
  • 63 Comments
      dlubeck_mbz
      • 1 Year Ago
      I thought there might be some hope, but at this point it looks grim. I hope their employees are looking for jobs. They may not have one much longer.
      Rotation
      • 1 Year Ago
      It's easy to try to blame a shutdown of DoE loans for this (and I'm sure Fisker will) the real problem is they just didn't make a vehicle that enough people want to buy at the asking price. Maybe Fisker going to bankruptcy will mean you can get a Destino cheaper.
        Marco Polo
        • 1 Year Ago
        @Rotation
        @ Rotation "real problem is they just didn't make a vehicle that enough people want to buy at the asking price" That's hardy fair, Fisker had loyal buyers who didn't find the price for the Karma a problem. But the company was always under-capitalised for the "Nina/Atlantic" project. Fisker had an incredible run of event's which were sheer bad luck, and inspired a lot of irrational hatred. But the Karma had it's fans, and could have attracted valuable export markets. Henrik Fisker was correct, the problems lay with so much of the companies overhead, energy and capital being diverted to a project far beyond the companies capacity. Fisker could have survived as a limited production GT manufacturer, but attempting to become a volume manufacturers was far beyond Fisker Automotive's capacity. Once Fisker himself resigned, all interest at a restructure or JV died.
          Rotation
          • 1 Year Ago
          @Marco Polo
          How is it unfair? They had some loyal buyers (I call them fools, but whatever), but there were not enough of them. I do not agree the problem was just a run of events. There is a limited market for that vehicle. Fisker had exhausted it before the real problems started. And when the real problems started, they immediately throw one of their "loyal customers" directly under a bus by issuing a statement that the fire was suspicious and mumblings about insurance fraud. After this, their chances of having more customers was of course made even smaller. I don't think Fisker could have continued as a maker of the Karma, there's just not much of a market. The Destino is a much better expression of a "limited production GT manufacturer". It doesn't take "irrational hatred" to not want to purchase a Karma at the price they were offered. Fisker made a product that made little sense, a vehicle that couldn't recoup the costs of making it. And that was the end of that. I do agree that once Fisker was gone you could write the schedule for the wind-down of the company. I just don't know that there was any other possible outcome given their product on offer. Fisker didn't make it as an EREV vend, the Volt beat the pants off it before it even got out the gate. And the market gets more crowded each day. All Fisker had left was some trappings of it being a premium car, but those trappings sell better in a package like the Destino than they do in the Karma configuration. And the cost of designing the Destino would have been a fraction of the Karma.
          Rotation
          • 1 Year Ago
          @Marco Polo
          Marcopolo: What forward orders? Their sales are dismal. It's an issue of past orders, current orders and future orders. No one is ordering the car. We already knew about the Sugarland, TX finances thing a long time ago. We know because it was one of the things Fisker wrote about the owner within a week of the fire. That's what I meant about mumblings of insurance fraud. Fisker didn't know when you have such a small customer base you have to be extra careful about attacking an owner and apparently you don't either. Is it no wonder Fisker didn't find more buyers with treatment like that? If you are trying to win a popularity contest (and companies who sell products are), then don't attack your supporters in the press without iron clad evidence. All Fisker (or you) would have had to do is look at what happened in Audi. It took them 20 years to recover from attacking their own customers (even with good reason!), Fisker doesn't have the resources to wait that long to recover. Yes, I know there are more people in the market for a luxury GT. That's why I said the Destino was a better idea. But the Fisker is not a good expression of what a GT is and what those customers are. Let me give some evidence here. Their sales were dismal. It really is that simple. Yes, there are buyers for GTs. No, apparently those GT buyers didn't want this car. How is it unfair to point this out? I call those people fools because they would be buying a car which was very poorly developed. See Brian Greenstone's videos. They could buy a GT which is a lot better for the money they spent. I do not call them fools simply because they want a luxury GT.
          Marco Polo
          • 1 Year Ago
          @Marco Polo
          @ Rotation You continue to harp on about the Sugar Land, Texas fire, the exact cause of which is unknown, but which the owners own insurer now lists as 'suspicious', (that would appear to confirm Fiskers insurers wariness) Nor did was the owner accused of arson, but suspected of being a victim of arson in an area with 8 times the national average of arson attacks), yet you refuse to acknowledge Fisker's loyal customers. In fact, before Hurricaine Sandy and A123 bankruptcy, Fisker's sales were doing very well. Fisker had reached it's first years target and was preparing for 1200 confirmed export orders. Some people like to kick anything suffering a misfortune, if you must, at least do so accurately.
          2 wheeled menace
          • 1 Year Ago
          @Marco Polo
          Mr. Fisker is a good designer, but not a good engineer or businessman. And he didn't hire good engineers or businessmen to compensate. It was doomed from the beginning, stop makin' excuses for a dead horse ;P
          Marcopolo
          • 1 Year Ago
          @Marco Polo
          @ Rotation So you have had a good look at Fisker's forward order book and accounts have you ? No ? So you're just speculating. You also must be speculating about the outcome of the Sugar Land, Texas fire since the owners insurance company has now decided that the matter may not be so clear as it first seemed. It would appear that the owner was less than truthful about his finances! Or are you referring to the second fire, in which the owner was pleased with the car despite the mishap he immediately purchased another ! (and wanted to invest in the company! ). There is absolutely no evidence that the Karma couldn't have been a successful limited production GT. It might not seem like it to you, but there are hundreds of thousands of 'fools' who are in the market for luxury GT's. Fisker only had to sell 2000 cars a year to stay in business. the US market could provide that alone without export. You are allowing what you think a car should be, to prejudice what you think others may choose to drive. (calling people fools because they don't share your taste in cars, is hardly a good basis for analysis !)
        PeterScott
        • 1 Year Ago
        @Rotation
        Yep, there was just no demand. You can't make a business case when your product demand is weak. Cleary demand for these cars was extremely weak. Fisker only produced around 2000 cars and despite 300 being destroyed in hurricane Sandy, and production being stopped for 6 months, there was still sufficient supply. The only logical conclusion is that demand was negligible. It doesn't matter how loyal your buyers are if they barely number in the 4 digit number range.
          Marcopolo
          • 1 Year Ago
          @PeterScott
          @ PeterScott Stick to selling Nissan
      EVnerdGene
      • 1 Year Ago
      what a waste
      • 1 Year Ago
      Dare I say that liberal dogma has run over the Karma?
      Spec
      • 1 Year Ago
      Unrelated to this story . . . I went for a run today and I passed 3 Models S cars in my neighborhood. Granted I live in an expensive area of Silicon Valley, I was amazed to see so many of them. I saw 5 when driving home the other day. They are really popular and have replaced the BMW, Audi, and Mercedes as the cool car to get for the rich execs.
        Giza Plateau
        • 1 Year Ago
        @Spec
        USA today reports Tesla claims Q1 will be profitable and that the base model will never be produced. Those who ordered the 40kWh version will get a 60 with digital limiting imposed and supercharger access. They say it's because only 4% ordered them but that's still 800 cars per year. I think the real reason is the price was not high enough to not lose money. So base price is now 70000$
          EVnerdGene
          • 1 Year Ago
          @Giza Plateau
          @PeterScott But only 4% of reservations were for the 40kw-hr. They may be "giving" these 4% the 60kw-hr pack, but that's cutting their losses. I'd bet they'll be cutting this small group a deal on "unlocking" their 60kw-hr pack. Recouping most of their loss ??? Could they make a profit on the 40kw-hr pack version ? Probably not. Are they making a profit on the 60kw-hr pack version ?
          Rotation
          • 1 Year Ago
          @Giza Plateau
          Agreed. The base price is now $70K (including delivery, before rebates). No two ways about it.
          PeterScott
          • 1 Year Ago
          @Giza Plateau
          Yeah Dan that makes a lot of sense. They couldn't make money on 40KWh cars so they are giving all the buyers of 40 KWh car a 60KWh battery, for the price of 40KWhs to save money. ;) What color is the sky in your world? Clearly if they are giving a 60KHw pack to all the 40 KWh buyers the volume couldn't have been large enough to bother building 40 KWh packs. Though I agree that it sucks that the price of entry is increasing for Tesla. They need to accelerate work on the Third generation.
          kidcharlemgne
          • 1 Year Ago
          @Giza Plateau
          Base price didn't change, and you misquoted base price for 60kWh too. Just saying :)
          Giza Plateau
          • 1 Year Ago
          @Giza Plateau
          Peter, always assume I'm a lot smarter than you.
      2 wheeled menace
      • 1 Year Ago
      A good april fool's joke would be one where this company made a profit.. *rimshot*
      • 1 Year Ago
      The Fiskers Karma is produced in Finland. How many US workers can they furlough? What about their Deleware plant?
      Giza Plateau
      • 1 Year Ago
      2200 cars, 1.2bn$ spent, that's 540k$ lost per unit, which means each one cost around 650k$ to build. How is it even possible to mess up that badly. That makes Tesla's 100k$ loss for each Roadster look like a good deal.
        Rotation
        • 1 Year Ago
        @Giza Plateau
        Good news, Giza! Using the accounting mechanisms you are using to price these cars at $650K, you've completely amortized all development costs and even facilities costs too! So now that means every car built after your proclamation is at a huge profit! That's right, starting today, they are absolutely cleaning up on cars because they are building them in a plant already paid for, using less than $40K in materials and selling them for $75K! I look forward to you changing your future comments to reflect the implications of your accounting methods.
          Rotation
          • 1 Year Ago
          @Rotation
          Giza: They haven't gone bankrupt. There's no mistake for me to own.
          EVnerdGene
          • 1 Year Ago
          @Rotation
          butt what if there are no more ?
          Giza Plateau
          • 1 Year Ago
          @Rotation
          Rotesy, I think the key word here is bankruptcy. Don't you. Let's see you own your mistake.
        Thereminator
        • 1 Year Ago
        @Giza Plateau
        You Cant be that stupid...wait-a-minute....
        EVnerdGene
        • 1 Year Ago
        @Giza Plateau
        Dang Dan, A $650k car that I can buy for $70k ? I'm goin' shoppin' http://www.carsforsale.com/used_cars_for_sale/Fisker
          raktmn
          • 1 Year Ago
          @EVnerdGene
          Let's play with your failed math. 2200 cars (bullsh!t number, but I digress), 1.2bn$ spent, and a company that has a market cap of about $5 billion dollars. Sell the company today at even half of it's current market cap, and you are talking $1.3 billion in profit after recouping that $1.2bn invested. That is $591K in PROFIT per car even if Elon had to sell the company at half it's current market cap using your accounting method. No wonder nobody will fund the Dan-mobile. You can't do simple basic accounting.
          EVnerdGene
          • 1 Year Ago
          @EVnerdGene
          where did you get the $5 Bigguns market cap ? "Sell the company today at even half of it's current market cap" ? That's a little high don't you think? Marco (Frisker fanboy) thinks ~$300Mil.
          Giza Plateau
          • 1 Year Ago
          @EVnerdGene
          I didn't say it was worth 650k$. It's not even worth the 70. A 2.4ton EV isn't worth anything
        Actionable Mango
        • 1 Year Ago
        @Giza Plateau
        You think you are the smartest person on the planet and yet you don't understand amortization.
          raktmn
          • 1 Year Ago
          @Actionable Mango
          Even in your absurd claim of bankruptcy, you have made a massive failure in your math. You've assigned a liquidated value of the entire company at zero dollars. That's patents, machinery, current stock, contracts, IP, factory, spare parts on hand, etc being worth zero dollars. Since it is clear you've put just as much thought into your claims of bankruptcy as you have put on the liquidated value of Tesla, you've completely discredited yourself yet again. What you have done, is like comparing how much it costs to buy a car outright in 36 months, to leasing a car for 36 months. And then failing to factor in the equity you would own in the car at the end of 36 months if you bought it outright compared to leasing it. Utter and complete math fail on a massive scale.
          Giza Plateau
          • 1 Year Ago
          @Actionable Mango
          Perhaps I do understand amortization and there is an element you are missing. Perhaps the word bankruptcy slipped your mind. It is a rather pivotal word isn't it.
      Afi Keita James
      • 1 Year Ago
      Fisker karma is still a beautiful car.
      Giza Plateau
      • 1 Year Ago
      TSLA stock price is exploding on the claim of profitability. Up almost 20% now. And the really clueless super fans only kick in late in the day when they get home from work so the price could see another surge then or after hours.
        Rotation
        • 1 Year Ago
        @Giza Plateau
        "claim of", heh? You have to own your own mistakes at some point, Giza.
          Rotation
          • 1 Year Ago
          @Rotation
          Giza: I do agree Musk talks big. But legally he cannot lie about things material to the company's performance. And profitibility is high on this list. If he said it is profitable, then it is profitable. You pretending it didn't happen doesn't change it. Yes, a single profitable quarter doesn't change the long term situation necessarily. Especially when Tesla was careful to make changes to delay expenditures (Model X) to make this quarter so. Announcing a stock offering to pay off the government would not infuse more cash, it would just get rid of the loan. You show me where I'm mistaken and we can talk about owning up. Right now we are still stuck at the issue of you denying sworn statements are true. Troll.
          Giza Plateau
          • 1 Year Ago
          @Rotation
          I say claim because Elon is a known liar.. If TSLA is suddenly profitable I can easily live with that as I'm far more interested in making douche BMW, Audi and Merc suffer and 60000 Model S' on the streets of the world would do that. Similarly I can live with TSLA surviving indefinitely on additional foolish cash infusions for the same reason. I stand by my statements at the time. There is even an old statement of mine that I thought I was proven wrong on that is now proven right. I expected years ago that they would increase the price of model S over the 50k$* and for at time they didn't but now the base price is 70k and the small one was never produced. I may yet be right about profitability as well. And even technically profitable in a quarter can still be certain death. If they tomorrow announce a new stock offering to buy out the gov loan to make the company look better with more cash infusion then I'm on the record months ago suggesting that strategy. when will you own your mistakes Rotes?
      2 wheeled menace
      • 1 Year Ago
      Lol, who was the guy who said furloughs were totally normal for a company like this...
        dexbusy
        • 1 Year Ago
        @2 wheeled menace
        Furloughs are perfectly normal for a company like this... A company going under!
      • 1 Year Ago
      DUH!
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