Fisker, the US electric-vehicle maker, has filed for bankruptcy protection, joining several other companies in the industry that have struggled to stay afloat amidst weak demand and operational challenges. The filing aims to restructure debt and sell assets after the company burnt through significant cash while attempting to ramp up production of its Ocean SUVs.

Founded by automotive designer Henrik Fisker, the company had expressed doubts about its ability to continue in business earlier this year. In February, Fisker failed to secure an investment from a major automaker, which led to the collapse of talks and the forfeiture of a $350 million funding opportunity from an undisclosed investor. These setbacks forced Fisker to explore alternative options.

In the Chapter 11 bankruptcy filing, Fisker Group Inc., the company's operating unit, reported estimated assets worth $500 million to $1 billion, and liabilities ranging from $100 million to $500 million. This comes after Fisker went public through a merger with a blank-check firm in 2020, injecting over $1 billion in cash and valuing the company at $2.9 billion.

The bankruptcy filing marks another setback for Henrik Fisker, who experienced a similar situation in 2013 when his previous venture, Fisker Automotive, filed for bankruptcy due to the 2008 financial crisis and a battery failure in their Karma hybrid sedan.

The company's troubles were further amplified by the launch of its Ocean SUV, which was plagued with software and hardware issues. Consumer Reports deemed the vehicle "unfinished business" and regulatory authorities initiated investigations into braking problems, difficulty in shifting gears, and intermittent door failures.

Despite initial plans to follow an "asset light model" by outsourcing manufacturing, Fisker faced difficulties in delivering their vehicles on time. After delivering less than half of the more than 10,000 cars produced last year, the company shifted to a dealership-based distribution model in January, abandoning Tesla's direct-to-consumer approach. However, this change failed to alleviate the company's struggles, as their inventory still consisted of over 5,000 unsold cars.

The collapse of Fisker and the bankruptcy filing did not come as a surprise to market analysts. Garrett Nelson, vice president and equity analyst at CFRA Research, commented, "Fisker has been on life support for months now, so today's announcement doesn't come as a surprise. It wasn't the first EV upstart to declare bankruptcy, and we don't think it'll be the last."

As the electric vehicle market continues to face intense competition and challenges, Fisker's bankruptcy filing highlights the difficulties smaller EV companies face in trying to establish themselves in a rapidly evolving industry.