Fisker misses $10M payment, is bankruptcy imminent?
Luxury automaker Fisker has officially missed a $10 million payment to the Department of Energy. Is a bankruptcy filing next?
Tue, Apr 23 2013 at 11:59 AM
Fisker Automotive is in serious financial trouble. In early April, the automaker laid off 150 of its 200 employees and rumors began to swirl that Fisker was preparing to file for bankruptcy. Now that Fisker has officially missed a $10 million payment to the Department of Energy (DOE), many are wondering if the filing is imminent.
Although Fisker missed the DOE payment, the government is going to receive at least a portion of the nearly $200 million that Fisker borrowed. According to DOE spokeswoman Aoife McCarthy, “The department recouped the company's approximately $21 million reserve account — funds that came from the company's sales and investors, not our loan — and will apply those funds to the loan.” Source: Reuters
Fisker received a $528.7 million loan award in April 2010 from the U.S. Department of Energy to support the development of two plug-in hybrid electric vehicles, the Karma and another vehicle that went by the name of Project NINA. The Karma made it to production status but was plagued with problems from the start.
A look back at the DOE’s press release announcing the loan shows just how far Fisker, and the electrified vehicle market, missed production expectations.
“When full production is reached in 2015, Fisker estimates annual sales at up to 115,000 vehicles. Combining Fisker projected sales volume with the expected sales volume of the Nissan Leaf and the Tesla Model S, sales of electric and PHEVs funded with DOE ATVM loans could exceed 300,000 annually.” Source: DOE
Unfortunately for the DOE, public adoption of electrified vehicles isn’t strong enough to support the 300,000 annual sales figure, especially since it focuses specifically on DOE loan-funded projects.
For now, Fisker is still operational but a bankruptcy filing or sales announcement is likely to come in the next few weeks.
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