Unless something dramatic changes in the next few weeks—possibly even the next few days—that's a wrap for Fisker Inc. The troubled EV startup's bankruptcy proceedings are turning into a liquidation of assets to pay back creditors, not a reorganization and rebirth with new financing, lawyers in the case said Friday. But who's looking out for the owners here?
That kicks off this Monday edition of Critical Materials, our morning EV and tech news roundup. We hope you're staying cool out there, wherever you are. Also on tap today: Hyundai accelerates an eagerly awaited Amazon sales program, and BMW cancels a battery contract with a supplier after some difficulties and delays.
30%: The Fight Over Fisker's Parts Gets Heated
It wasn't even a full year ago that Fisker was showing off three all-new EVs, an off-road-ready Ocean variant and a "supercomputer" meant to power future vehicles. Now, whatever's left of the company will be doled out to various creditors in a Delaware bankruptcy court.
Reuters has the scoop on what's happening in that case, including a Fisker attorney confirming that the company does "not currently anticipate being able to obtain financing." In other words, there's no automaker, other company or financier coming in to save the day and reorganize the company into something new. A few months ago, it was reported (also by Reuters) that Nissan was in talks for a partnership with Fisker, possibly to build an electric pickup truck, but those fell through quickly. Now, no one is coming to save Fisker.
That means the company could very likely go from a Chapter 11 bankruptcy to a Chapter 7 one, which is a straight liquidation. And it might leave a lot of Fisker's other creditors in the lurch after its biggest lender, private equity firm Heights Capital Management, gets paid whatever they get paid.
Some details from that story:
[Fisker attorney Brian] Resnick told U.S. Bankruptcy Judge Thomas Horan that the company planned to liquidate its assets, and it has reached a tentative deal with a single buyer for all of its 4,300 vehicles.
The California-based company, founded by automotive designer Henrik Fisker, was never profitable, with about $273 million in revenue in 2023 and a net loss of $940 million.
Fisker owes over $850 million to two groups of bondholders, and attorneys for the larger group accused a minority faction led by Heights Capital Management of seizing control of Fisker's debt in November through a "suspect" transaction with Fisker.
At the time, Fisker was late in providing audited financial statements due under its debt agreements, and Heights used that "minor, technical default" to claim all of Fisker's assets as collateral on its bonds, Alex Lees, an attorney for other bondholders, said.
"They basically handed the whole business over to Heights," [creditor lawyer Alex] Lees told Horan. "Fisker has been liquidating outside of this court's supervision, basically for one creditor's sole benefit."
Emphasis mine up there. It's currently unclear who the "single buyer" of those remaining Ocean EVs could be; we've heard rumors, but nothing concrete yet.
And as TechCrunch reported, attorneys on both sides are now wondering why a Fisker bankruptcy didn't happen sooner, since the company was in very serious financial trouble even last fall:
Lees was not alone in his concern over how Fisker wound up filing for bankruptcy. “I don’t know why it took this long,” Linda Richenderfer, a lawyer with the U.S. Trustee’s Office, said during the hearing. She also noted that she was still reviewing new filings late Thursday and in the hours before the hearing.
[Heights capital lawyer Scott] Greissman said at one point that he agreed that Fisker “probably took more time” than needed to file for bankruptcy protection, and that some of these quarrels could have been “more easily resolved” if the case had started sooner. He even said he agrees with Richenderfer that “even with a fleet sale, Chapter 11 may not be sustainable.”
The creditors will get their piece, or some version of it. But I'm wondering what happens to the Fisker Ocean owners here who will need long-term parts support and, perhaps more importantly, software support.
A group of owners is attempting to step up and negotiate for those things and owners' rights at the table, but this may all be over before they even get a chance to sit down. More on this as it develops this week.
60%: Hyundai Steps Up Amazon Sales Program
Would you buy a car using Amazon?
Hyundai wants you to be able to do that—or at least, to shop around, spec what you want and arrange financing and delivery on the e-commerce giant's platform. A program to do exactly that was announced last year, but besides a pilot program only open to Amazon employees, it's moved along fairly slowly.
But Automotive News reports that the program is moving into a larger beta stage, inviting more dealers to sign up—and warning them that not every store will be able to participate. It seems we'll learn more about how this works in the coming weeks, possibly even in the next one.
This program is a big deal because it represents a huge disruption to the car-buying process, which for so-called "legacy" automakers is entirely defined (including by law) by third-party franchise dealers. You cannot "order" a Hyundai Ioniq 5 online the way you can with a Tesla. But the Amazon program is meant to sort of bridge that gap by allowing you to do the shopping part on their site, and then connecting you with a dealer who handles the details of the sale and delivery.
(I'll also say what no one else will: Hyundai is probably doing this because, as world-class as its current EV lineup is, its dealership experience is still notoriously poor. Some are great, but many more are stuck in the 1990s when the brand catered almost exclusively to subprime buyers. Going through Amazon may be meant to circumvent most of those headaches.)
But many questions remain, including around leasing, competitive pricing, negotiation, customer data and more. As we all know, dealers aren't often in a rush to evolve, especially when it comes to new technology. From the story:
According to a dealer who asked not to be identified, Hyundai and Amazon are in the process of adding dealers and are planning to go live with an expanded pilot July 1.
Don Hall, president of the Virginia Automobile Dealers Association, who was on one of the calls, told Automotive News there are "more unanswered questions than not."
One is how Amazon will facilitate trade-ins. Another is leasing. "We are at a unique position in the history of the auto industry that trade-ins matter a lot to dealers. They are dying for good quality used-car inventory," Hall said.
"We don't want to see this car sold off to outside folks who sell used cars online. It's not a small point, it's a big point," he said.
According to Amazon, a trade-in feature is still under development and will be available later in the year.
I am interested to see where this goes next, because if done right, it could be a game-changer for the industry.
90%: BMW Cancels $2 Billion Battery Order
BMW is backing off a $2 billion deal to buy EV batteries from Swedish supplier Northvolt, not because of declining sales or demand—the Bavarian automaker is actually doing quite well there—but because of delays and quality problems.
Here's Yahoo! Finance with more:
"Northvolt and the BMW Group have jointly decided to focus Northvolt's activities on the goal of developing next-generation battery cells," said a BMW spokesman on Thursday, confirming a report by Manager Magazine.
The magazine cited problems at the battery cell supplier in ramping up industrial series production as the reason for the cancellation. Northvolt, which was founded in 2016, is reportedly two years behind schedule and facing quality issues in its manufacturing.
BMW declined to comment on the reasons for the order cancellation. The spokesman said the carmaker is "still very interested in establishing a high-performance manufacturer of circular and sustainable battery cells in Europe."
Now, Korean giant Samsung SDI will supply batteries instead. But Northvolt will still be expected to supply batteries for the upcoming Neue Klasse EVs. Let's hope they get it right, because those models will be hugely important to the automaker's future.
100%: Is This It For EV Startups?
As I wrote last week, I see Fisker's bankruptcy as more a product of how the company was managed, rather than a symptom of any EV sales slowdown. But you do have to admit it's tough out there for new players right now.
Besides ultra-high interest rates, you have more "legacy" players getting serious about EVs and software-defined cars than ever, plus new brands from China that are clearly not messing around. For now, at least, the days when a company can bootstrap something all-new like Rivian, Fisker, Lucid or even Tesla seem behind us.
Or are they? Where do you see EV startups going next? Let us know in the comments.
Contact the author: patrick.george@insideevs.com
