Electric vehicles may be the future, but Americans have resisted adopting them.
That may be because they're more expensive than internal combustion engine cars and the charging infrastructure to power them has not yet been fully developed.
Even Tesla, the market leader in the EV space, saw sales slump 9% in the most recent quarter, worse than the overall trend.
It's also possible that Chief Executive Elon Musk's openly right-wing political takes have caused the left-leaning pro-environment movement to shy away from the brand.
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Overall, EV sales clearly are weakening.
"Electric-vehicle sales growth in the U.S. continues to slow, according to sales data analyzed by Kelley Blue Book," Cox Automotive reported. In Q1 2024, Americans bought 268,909 new EVs, according to Kelley Blue Book. "EV share of total new-vehicle sales in Q1 was 7.3%, a decrease from Q4 2023," Cox reported.
Sales have continued to grow on an annual basis, but the rate of growth has slowed.
"Sales in Q1 rose 2.6% year over year but fell 15.2% compared to Q4 2023. The increase last quarter was well below the previous two years," the website reported.
Tesla should be able to bounce back from its sales slump, although its reputation has been hurt by its polarizing leader, but lesser players in the space may not survive.
One of the industry leader's most prominent rivals has struggled with sales and recently missed a loan payment, which could force it into a Chapter 11 bankruptcy.
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Fisker faces financial woes
Fisker (FSR) has a noble mission. The company says it's "driven by a mission to create the world’s most emotional and sustainable electric vehicles."
That's nice, but the company has struggled to produce cars.
"Fisker Ocean production was 4,789 units in Q4 2023, and vehicles delivered to customers totaled 3,818," the company said in its fourth-quarter report. "For full-year 2023, 10,193 Fisker Oceans were produced and 4,929 vehicles were delivered."
The company has acknowledged liquidity concerns and said at the top of the report that it's working on a potential company-saving transaction.
"Fisker is in negotiations with a large automaker for a potential transaction which could include an investment in Fisker, joint development of one or more electric vehicle platforms, and North America manufacturing," the company said.
"The closing of any transaction would be subject to satisfaction of important conditions, including completion of due diligence and negotiation and execution of appropriate definitive agreements."
The company closed the year with $395 million in cash and cash equivalents. That's not enough to survive 2024, according to the company.
"The company will need to seek additional equity or debt financing, and there can be no assurance that Fisker will be successful in these efforts," Fisker said.
As a result, "the company expects to conclude there is substantial doubt about its ability to continue as a going concern when its annual financial statements for the year ended Dec. 31, 2023, are filed with the SEC."
Fisker misses a loan payment
The EV maker recently filed an 8-K with the Securities and Exchange Commission detailing that it has missed a key loan payment.
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"The filing states that Fisker failed to pay back a loan totaling close to $3.5 million last month, lowering a potential curtain on the second iteration of the company that is staring down the barrel of potential bankruptcy," Electrek reported.
Fisker's financial honesty (which is required by law) could be compounding its problems as "tens of thousands" of people have canceled their Ocean reservations, according to the EV news website.
That makes sense because people don't want to invest in a high-end, high-priced vehicle if the company that makes it won't be around to service it.
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"With millions owed in loans and the looming threat of late fees and applicable interest, Fisker may need to scrap together what is left to make good on its loan, although the repayment (of whatever amount) may result in bankruptcy," Electrek added.
The company has not disclosed new details about the potential transaction with a large automaker.
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