EV startup Fisker has agreed to sell its remaining inventory of Ocean SUVs to a leasing firm as the company’s co-founder reduced his salary to $1.
According to a filing made July 2, Fisker will enter an agreement to sell the remaining 3,231 Ocean SUVs in its possession to American Lease, a New York-based firm that leases to ride-share users.
American Lease agreed to pay between $2,500 and $16,500 for each Ocean, depending on vehicle condition. The lower amount will be reserved for damaged vehicles, while previously titled Oceans will go for slightly more at $3,200.
American Lease Deal
Between fleets in the United States and Canada, Fisker says in the filing that it has 2711 new vehicles in “Good Working Order” reserved for the top $16,500 price. While the final scope and dollar amount of the sale are still pending, the total figure is currently capped at $46,250,000.
The filing provides additional information about long-term support. According to the documents, the automaker will not be honoring warranties on this deal, stating, “Fisker shall have no obligation of repair or maintenance.”
While Fisker is in agreement to make that sale to American Lease, another potential buyer has approached the startup — but that unknown party is under NDA and it’s not been made clear what, exactly, they might want and what they’d be willing to pay.
Fiskers Cuts Their Pay
Meanwhile, Fisker Inc. co-founders Henrik Fisker and his wife, Geeta Gupta-Fisker, are lowering their salaries to $1 in order to keep their EV startup’s bankruptcy proceedings funded, as lawyers work to complete a sale of its remaining inventory. The decision July 8 came after company lawyers were grilled about the issue in court.
Fisker filed for Chapter 11 bankruptcy protection on June 17, less than two weeks after the troubled electric vehicle maker recalled the nearly 7,000 Ocean SUVs from the 2023 model year due to an issue regarding the Motor Control Unit (MCU).
“Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently,” the company wrote in a prepared statement at that time. “After evaluating all options for our business, we determined that proceeding with a sale of our assets under Chapter 11 is the most viable path forward for the company.”
New Recall
The company has issued a second recall that affects all cars sold in the United States in less than a month.
This time, the issue that prompted Fisker to recall all 7,545 Ocean EVs in the country has to do with a communication loss on the vehicle’s Local Interconnect Network 6 (LIN6) that can cause the High Voltage Battery Management System (BMS) to go into limp mode, limiting the battery output to just 8.5 kilowatts, which experts says is barely enough to move the car under its own power.
The first recall affecting all Ocean EVs in the U.S. was issued on June 20, for door handles that can stick and fail to open, which can prevent the driver and passengers from exiting the vehicle in an emergency. In total, the model has been the subject of four recalls in the U.S., two of which have been fixed through software updates.
Path to Bankruptcy
Fisker launched in 2016, cut 15 percent of its workforce while offering a bleak outlook on the company’s future earlier this year. The initial layoffs were followed by aforementioned pause in production and huge slashes to the pricing of the Ocean SUV, the only Fisker model in production and on sale.
At the time of the pause, the company disclosed it had received a financing commitment of up to $150 million from an existing investor and was in negotiations with a large automaker for a potential transaction which could include an investment for a joint development of one or more electric vehicle platforms, and North America manufacturing.
The automaker was not named but a previous report said Nissan was in advanced talks to invest in the company in a deal that could act as a financial lifeline for the cash-strapped EV startup. But a deal would never come to pass.
Related stories:
