Leaked data obtained by Business Insider reveals that over 40,000 reservations for the Fisker Ocean electric vehicle (EV) have been canceled, painting a challenging picture for the EV company as it grapples with financial woes and potential bankruptcy concerns.
Reservation Dilemma
The leaked internal company metrics indicate that out of more than 70,000 reservations for the Fisker Ocean, a significant number — exceeding 40,000 — have been canceled. Fisker initiated pre-orders for the Ocean in November 2019, and by February 2023, it had garnered “approximately 65,000” reservations ahead of its initial deliveries.
In recent observations, Fisker has been experiencing an average of 70 to 80 cancellations per day, as per the internal metrics accessed by BI.
Financial Impact
These reservation cancellations pose dual challenges for Fisker. Firstly, they signify potential lost sales during a crucial period where revenue generation is paramount for the company’s stability. Secondly, they contribute to financial burdens, albeit partially offset by refund policies.
While reserving a Fisker costs $250, with a $25 processing fee deducted upon cancellation, the company’s reservation terms offer a $100 refund for those canceling multiple EV reservations. Over the years, Fisker may have already reimbursed a significant amount, estimated around $9 million, for canceled reservations.
Order Cancellations and Price Adjustments
Apart from reservations, Fisker has also encountered a few thousand order cancellations, distinct from reservations and involving non-refundable deposits and fees. Meanwhile, in a bid to revitalize sales, Fisker slashed prices for its flagship EV by 39% recently, making the SUV more accessible at around $25,000.
Financial Struggles and Strategic Alternatives
During its February earnings call, Fisker hinted at financial challenges, raising concerns about its survival in 2024. The company disclosed pausing electric car production for six weeks in a regulatory filing, with around $121 million in its coffers as of mid-March.
Fisker secured a commitment for up to $150 million in additional financing but faced setbacks when negotiations with a major automaker failed, jeopardizing the funding guarantee. The company is now exploring alternative financing options and waiver negotiations to navigate its financial hurdles.
Henrik Fisker, the CEO and founder, previously led Fisker Automotive, which filed for bankruptcy in 2013. Fisker’s current venture, initiated in 2016, faces significant challenges as it strives to stabilize its financial standing amid a competitive EV landscape.
