American electric vehicle manufacturer Fisker declared bankruptcy on Monday following months of financial losses attempting to get its Ocean SUV in front of American and European consumers.
Henrik Fisker filed for bankruptcy for the second time as an EV maker after attempting to obtain investments—including from Nissan—but without success. In 2013, Fisker Automotive—his first electric vehicle company—went bankrupt.
Now, Proterra, Lordstown, Electric Last Mile Solutions, Arrival, and Fisker are among the increasing number of EV firms that have failed.
These businesses all experienced rapid growth a few years ago as investors looked for easy ways to duplicate Tesla’s success. However, at the time, investors were unaware that Tesla had previously burned through billions of dollars in cash and nearly went bankrupt multiple times while it worked to perfect production at scale.
The SPAC frenzy ended as loan rates began to rise, since most firms were founded on promises of future revenue before they even had a workable product.
After that, it turned into a race against time to reach scale, which got much more difficult for companies like Fisker after Tesla launched a price war last year.
Fisker is unlikely to be the last to go as things become more difficult for tiny EV manufacturers, particularly in China.