Fisker plunges 55%, drags EV stocks lower as it reportedly mulls bankruptcy
Fisker
- Fisker stock plunged 55% on Thursday after a report said it is considering bankruptcy.
- The troubled EV company has seen its stock fall 92% year-to-date.
- The sharp decline in Fisker dragged down other EV stocks like Tesla, Rivian, and Lucid.
Fisker stock plunged as much as 55% on Thursday after The Wall Street Journal reported that the company is considering filing for bankruptcy.
Fisker has been one of many electric vehicle startups that have yet to find the type of success that their biggest competitor, Tesla, has managed to find.
The company, which operates an asset-light model in which it designs vehicles and then outsources the manufacturing of them to OEMs, has struggled with meager sales amid a broader slump in demand for EV vehicles.
In 2023, the company produced 10,142 units of its flagship Ocean vehicle, and it delivered just 4,700 of them to customers. Fisker stock is down 92% year-to-date.
According to The Wall Street Journal, a cash crunch led the EV company to hire a financial adviser and law firm to help navigate a potential bankruptcy filing.
Fisker lost $762 million last year on $273 million in sales, and held more than $1 billion in debt.
Not helping Fisker's situation in recent weeks has been a review of the Fisker Ocean by popular YouTube reviewer Maques Brownlee, who called it "the worst car I've ever reviewed."
Fisker's decline on Thursday dragged down the entire EV sector, which is made up of a handful of smaller companies and Tesla.
Tesla stock dropped 4%, Rivian fell 9%, and Lucid dropped by 6% in Thursday trades.
Slower than expected growth in the US EV market has extended the multi-year decline in the EV sector, which peaked in late 2021 when Rivian went public at a valuation that was briefly north of $150 billion. Today, Rivian is worth just $10 billion.
The US-based EV companies not only have to compete with China's BYD, which has been flooding the global market with low-cost electric sedans, but also with hybrid vehicles, which have seen a marked jump in sales in the US as consumers continue to deal with EV range anxiety.