Electric vehicle startup Fisker Group, founded by Danish automotive designer and entrepreneur Henrik Fisker, has filed for Chapter 11 bankruptcy protection in Delaware District Court, listing estimated assets of $500 million to $1 billion and liabilities of $100 million to $500 million. Here’s what you need to know:

Why did Fisker file for bankruptcy?

California-based Fisker, known for its Ocean SUV—thousands of which were recalled voluntarily earlier this month—faced financial difficulties due to production challenges, organizational missteps, and weakening demand for electric vehicles.

Fisker’s journey has been marred by various issues since the delivery of its all-electric Ocean SUV last year. Customers reported numerous software and mechanical problems. Internally, the company struggled with customer service and financial management, as TechCrunch reported.

The news comes despite Fisker’s efforts to secure a deal with another automaker and rounds of layoffs to preserve cash.

Why does this sound familiar?

The bankruptcy is reminiscent of Henrik Fisker’s first venture, Fisker Automotive, which ended in bankruptcy in 2013. Fisker Automotive, known for its hybrid electric sports car, faced similar production and quality issues that led to its downfall. The company’s assets were later acquired and rebranded as Karma Automotive.

Fisker joins embattled EV startups Lordstown Motors and Arrival, both of which recently filed for bankruptcy. These companies, initially hailed as potential disruptors in the automotive industry, struggled to maintain operations amid high development costs and lower-than-expected consumer demand.

Why the dip in the EV market? 

The market for electric vehicles has encountered a significant slowdown, despite initial rapid growth driven by early adopters. Some analysts attribute this stall to a critical juncture in the technology-adoption lifecycle, where the preferences of the majority—more practical and cautious consumers—differ markedly from those of early innovators. 

Major automakers including General Motors and rental giant Hertz have scaled back their ambitious EV plans. Research from GSK indicates that consumers favor hybrid and plug-in hybrid vehicles as a transitional solution, prioritizing reliability, lower maintenance costs, and ease of charging over the allure of fully electric models. 

Despite setbacks, there is optimism for future growth in the EV market. Corey Cantor, an industry analyst with Bloomberg New Energy Finance, anticipates an improvement in sales and market demand, according to CNN. Governments in Europe are scaling back incentives but will implement stricter emissions regulations next year. Similar trends are expected in the U.S. market. 

Automakers may delay some EV sales to next year to help meet these new standards. Additionally, the industry’s shift to the Tesla charging standard and the introduction of new and more affordable models, like the Chevrolet Bolt EV and electric Dodge Charger, are expected to renew interest in EVs.

“If you look at automakers, where they’re planning their kind of big EV bumps, or new EV models, a lot of it’s in ’25,” Cantor told CNN, suggesting a brighter future ahead for the EV market despite current struggles.