Fisker Group, the operating subsidiary of Fisker Inc., filed for Chapter 11 protection in the District of Delaware Monday, according to a company press release. 

The company is currently in discussions with financial stakeholders regarding debtor-in-possession financing and the sale of its assets. 

“Fisker has made incredible progress since our founding, bringing the Ocean SUV to market twice as fast as expected in the auto industry and making good on our promises to deliver the most sustainable vehicle in the world,” the press release says. “We are proud of our achievements, and we have put thousands of Fisker Ocean SUVs in customers’ hands in both North America and Europe. But like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently. After evaluating all options for our business, we determined that proceeding with a sale of our assets under Chapter 11 is the most viable path forward for the company.” 

Bankruptcy documents show the company has between $500 million and $1 billion in assets, with $100 million to $500 million in liabilities. 

The company alerted investors that it faced bankruptcy via a Securities and Exchange Commission (SEC) filing in March. It also paused production, which has remained in place for several months. 

Fisker held some hope that the company would stay afloat as it continued negotiations with a large automaker that could include an investment in Fisker. By late March, the company reported the deal was terminated and its stock was being delisted. 

In May, an SEC filing said it defaulted on repayment of a loan. 

The New York Times reports that the filing comes roughly one year after it delivered its first vehicle and four years after it went public. It also reports this is the second time Fisker’s founder, Henrick Fisker, has overseen a car company that has gone bankrupt. Fisker Automotive filed for Chapter 11 protection in 2013. 

“Fisker was among the E.V. start-ups that raised billions of dollars on the promise of rapid growth, making their market debuts by merging with special purpose acquisition companies in 2020 and 2021,” the article says. “Some of those firms, including Lordstown Motors, Arrival, and Proterra have also filed for bankruptcy. Others, like Canoo and Nikola, have struggled financially.” 

The article adds, “Demand for electric vehicles, while brisk, has disappointed auto executives, raising questions about heavy investments in new models and factories, even at market leaders like Tesla. Intensifying competition from Chinese automakers is also a worry for Western executives.” 

Tesla told employees in April that it would lay off 10% or about 14,000 people as it cut costs. It also reported a significant drop in vehicle deliveries for Q1 citing the production ramp of its updated Model 3, an arson attack at its Gigafactory Berlin, and the Red Sea conflict as partial reasons for the volume decline. 

The company produced 433,371 vehicles and delivered 386,810 during the first quarter, a press release says. It is the first Q1 decline for the company since 2020, according to Yahoo Finance. It also reported delivery and production are “well below” Q1 estimates for the company.

Ford Motor Co. rolled back requirements for its dealership electric vehicle (EV) certification program last year, then it paused the program last month and now it is scrapping the program altogether. Company officials told media that part of the reason for the change was that EV sales haven’t grown as quickly as expected as customers remain concerned about their price, access to charging stations, and how an EV would change their lifestyle. 

Forty-six percent of current EV owners in the United States told McKinsey & Co. they would likely switch back to an internal combustion engine (ICE) vehicle during the firm’s 2024 Mobility Consumer Global Survey. 

Thirty-five percent of respondents said an inadequate charging infrastructure was one reason they wanted to switch. Other top answers included total costs of ownership and too much impact on long-distance trips. 

Last month, President Joe Biden announced 100% tariffs on Chinese EVs as a way to divert fears that China’s low-cost vehicles posed a threat to U.S. jobs and security. 

The Alliance for American Manufacturing released a paper in February titled “On a Collision Course” that focused on the threat of the Chinese EV market to the U.S. auto industry. 

“The introduction of cheap Chinese autos, which are so inexpensive because they are backed with the power and funding of the Chinese government, to the American market could end up being an extinction-level event for the U.S. auto sector, whose centrality of the national economy is unimpeachable,” the paper says.

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