California EV Maker Fisker Has Filed Bankrupt, Here’s What Buyers Are Doing About It

Michael Rosito loves his Fisker Ocean One, the first model of the all-electric SUV that debuted last year.

The 62-year-old manufacturing and supply chain consultant says the fully-equipped car, for which he paid $69,500, “puts to shame” the Lexus sports cars he has long driven, recently leaving a BMW X5 “in the dust.”

Here’s what the San Jose, California, resident doesn’t like: He’s already received three home service calls, but he still has broken vents and internet connection issues — not to mention several open recalls that haven’t been resolved yet.

He’s even less pleased that Manhattan Beach, California-based Fisker Inc. filed for bankruptcy in June, raising questions about whether the SUV he bought a year ago will ever get the service and parts it needs.

“I would say that even going back to February, it was very difficult to get, even before the bankruptcy, any service from Fisker,” Rosito said.

With a long career in the tech industry behind him, Rosito wasn’t one to sit idly by, though. He joined forces with other Ocean buyers to form the Fisker Owners Association to represent their interests. It now has more than 3,000 members.

More than 6,000 Fisker Oceans have been sold worldwide since the car was introduced last year, with list prices ranging from $38,999 to $61,499 for later models (before the ailing company lowered prices in March). Buyers include not only those with higher incomes but also atypical types willing to take a risk on an upstart electric vehicle from an upstart carmaker.

Glitches in the software that controls the new all-electric SUV have contributed to a flood of harsh online reviews — perhaps hastening the Fisker’s demise, despite over-the-air updates that improved performance. Still, the car has been praised for its design and ride, with at least one review calling it better than a Tesla Model Y.

“There was a lot of negative coverage of this car, up until it was sold out, and a lot of positive things weren’t mentioned,” said San Antonio resident Brandon Jones, 39, interim president of the owners’ association, who bought the Ocean Extreme for $46,000 in April. “That’s why this is happening now, because a lot of us love our cars.”

The group has hired a lawyer to represent its interests in Chapter 11 restructuring proceedings in U.S. Bankruptcy Court in Delaware. The startup sought bankruptcy protection after failing to reach an agreement with a major automaker or other strategic partner before it ran out of cash to pay off its debts.

The main goal of the association is to provide service and constant supplies of spare parts, constant access to software in the Internet “cloud” necessary for using the car, as well as resolving overdue service campaigns and receiving compensation for the vehicle warranty.

“Our top priority is to make sure that vehicles that people paid good money for just a few months ago … don’t become very expensive hunks of metal in a year,” said Daniel Shamah, a lawyer for the group.

The association identified new parts stored in supply warehouses, at parts manufacturers that didn’t ship them and at the company’s contract factory in Graz, Austria, where about 4,200 Oceans were waiting to be assembled when Fisker halted production in March, Rosito said. Scrapped Oceans are also a source.

The group’s concerns grew when American Lease, a Bronx, N.Y.-based company that leases cars to Uber and Lyft, submitted a $46.25 million offer for Fisker’s remaining inventory of 3321 Oceans, according to court documents. That works out to an average of about $13,900 per vehicle.

The company said the cars will help it meet the city’s Green Rides initiative, which requires ride-sharing vehicles to be converted to zero-emissions or wheelchair-accessible by 2030.

The sale was approved by a bankruptcy court on July 16 after talks between the ownership group and the leasing company. The association filed a statement supporting the sale, provided the two sides continue discussions about parts and software, resolving product recalls and other issues.

An American Lease executive, who asked not to be identified because he was not authorized to comment publicly, said the company and the association have an opportunity to secure a long-term supply of spare parts by buying them jointly from suppliers at discounted prices.

However, he added that the association would have to work out its own access to Fisker’s cloud software because the purchase agreement covers only vehicles owned by American Lease.

This is not the first time that a group of Fisker car owners have faced a similar situation.

Founder Henrik Fisker, 60, a renowned car designer, previously founded Fisker Automotive in 2007, an Anaheim startup that went bankrupt six years later. He sold more than 2,000 Karma hybrid sports cars priced at about $100,000, which were coveted by Hollywood stars.

Forrest Cadam, general manager of Pat’s Garage in San Francisco, which repairs Karma vehicles, acknowledged that finding replacement parts can be difficult, even though the shop maintains its own inventory and some parts are not specific to Karma models because they are equipped with GM engines.

“It’s definitely not easy. Sometimes we have to hunt a lot, but most of the time we can solve most problems,” he said.

A key element in allowing the workshop to continue servicing the vehicle, he said, was access to the company’s closed-door diagnostic tool, something that was also a concern for Oceans vehicle owners.

The association, in its court filing supporting the sale of American Lease, noted that Fisker must spend the funds to clean up an open recall involving a faulty cabin water pump that can cause a vehicle to lose power. Another recall involves door handles that don’t work on some vehicles.

Fisker, which closed its Manhattan Beach headquarters in May and moved its remaining employees to Orange County, is still operating. Henrik Fisker remains CEO, though the company hired a chief restructuring officer before the bankruptcy.

At a hearing on Monday, Fisker’s largest secured creditor, CVI Investments, will ask the court to convert the company’s restructuring to a Chapter 7 liquidation.

Fisker opposes the motion, saying it is premature and would result in the loss of key personnel who provide services to more than 4,000 customers in the U.S. and are trying to resolve outstanding recalls before selling remaining assets.

Shamah also expressed concern, noting that such a conversion would mean being placed in the hands of a bankruptcy trustee. “These people often don’t have as much knowledge about some of the technical aspects of something like a Fisker electric vehicle,” he said.

Jens Guthe, the Ocean buyer in Norway, said the owners had already made progress on their own issues, including reverse engineering the SUV’s application programming interface, which allowed them to develop an app that could replicate the remote’s functionality. He bought the Fisker Ocean One for about $70,000, which he received in August 2023.

“We’re well on our way to having the phone as a key, which will solve the problem of not being able to buy more than one car key,” said Guthe, a 65-year-old international banker who previously worked at JPMorgan Chase.

He added that it helps that many Fisker owners are “over 40 with a nerdy, geeky interest in technology.”