Firesale Alert: Fisker is Now Selling Electric Vehicles to NYC Uber Drivers for 80% Off?

Fisker, the former underdog in the EV race against Tesla, is now in full panic mode. 

After filing for Chapter 11 bankruptcy, they’re looking to sell off their unsold fleet at an 80% discount. Yes, you read that right: 3,300 electric SUVs are now priced like they’re in a thrift store clearance bin.

The master plan here? Sell these bargain-priced beauties to American Leasing, the company that supplies Uber and Lyft drivers in New York City. According to court records and TechCrunch, these EVs, originally selling for around $70,000, are now going for about $14,000 each. So, if you've ever wondered if your next Uber ride could be a bargain-bin Fisker, now you know.

(Source: CNN)

Fisker isn’t just having a sale for the fun of it. They need to make payroll this month, and with 179 employees still on the books, the company’s scrambling for cash like a college student at the end of the semester. This deal with American Leasing could bring in up to $46.25 million, enough to keep the lights on and maybe even buy some decent office coffee.

The road to bankruptcy hasn’t been smooth for Fisker. They filed for Chapter 11 in June after years of losing money. Even as they were gearing up to deliver vehicles last year, they were scavenging parts from the personal EVs of their CEO and CFO. Sounds like something Matilda’s dad would do, doesn’t it?

The drama hit a new low in February when YouTube star Marques Brownlee, with his 19 million followers, posted a video titled, “The Worst Car I Ever Reviewed,” about Fisker’s 2022 Ocean model. 

(Source: Business Insider)

The video went viral, garnering 5.7 million views and causing Fisker’s stock to plummet. Brownlee took to X (formerly Twitter) to say, “I know everyone’s commenting that I killed them, but truth is they were doomed long before any of my videos.” It’s like the Titanic blaming the iceberg for all its problems.

Even with this fire sale, there’s no guarantee the deal will go through. Some creditors, especially those who bought Fisker vehicles, are worried the company will run out of money to pay its debts and support current owners. Linda Richenderfer, a lawyer for the US Trustee's Office, which oversees bankruptcies, said at a hearing, "There are ways that funds can be captured." Translation: this mess isn’t untangling itself anytime soon.

Fisker’s troubles are part of a larger issue in the electric vehicle industry. Despite the initial hype, EV sales have slowed. According to J.D. Power, EV sales grew only 3.3% to nearly 270,000 in the first three months of this year, far below last year’s 47% growth. Rising inflation and a lack of charging infrastructure have made EVs a tougher sell. Tesla, the grandaddy of EVs, has had to cut prices and jobs, proving that even the mighty can fall.

(Source: New York Times)

Henrik Fisker, the man behind the company, has a history of ambitious projects and setbacks. His first venture, Fisker Automotive, went bankrupt in 2013 after receiving a $529 million loan from the U.S. Department of Energy. 

(Source: Business Insider)

This second attempt at an EV startup isn’t faring much better. Earlier this year, Fisker received a warning from the New York Stock Exchange when its stock dipped below $1.

The court has ordered Fisker to provide an update by July 9, and the company's request to sell its fleet will be argued next Thursday. Will Fisker manage to stay afloat by selling their electric dreams at rock-bottom prices? Considering their stock is currently trading like an altcoin in a crypto winter… I think this one’s for the books.

Stocks.News has positions in Tesla.