Fisker, the electric vehicle (EV) startup, has found a potential buyer for its remaining inventory of all-electric Ocean SUVs. The company has asked the Delaware Bankruptcy Court judge overseeing its Chapter 11 case to approve the sale. If approved, Fisker will sell 3,231 finished EVs to a New York-based vehicle leasing company for $46.25 million, which amounts to around $14,000 per vehicle. This price is significantly lower than the original starting price of approximately $70,000 and even lower than the bargain-bin prices offered during Fisker’s descent into bankruptcy.
The sale of the Ocean SUVs has become a contentious issue in Fisker’s bankruptcy proceedings. Lawyers representing the company’s unsecured lenders have expressed concern that they will not receive the proceeds from these sales. Fisker owes around $1 billion to its unsecured creditors. The total value of Fisker’s other assets is also unclear, and the release of this information has been delayed.
The buyer of the Ocean SUVs is a New York-based vehicle leasing company called American Lease. The company mainly offers its vehicles to ride-hail drivers in the New York City area, where zero-emission fleets will be required by 2030. American Lease initially agreed to buy 2,100 Ocean EVs on May 30, but later increased the offer to include all 3,231 vehicles configured for North America. However, the deal excludes Canadian-configured vehicles located in Canada. American Lease will not be able to re-sell the vehicles for 12 months and will purchase them on a sliding scale based on their condition.
Fisker’s lawyers are pushing for expedited approval of the sale, stating that without it, they will be unable to fund vital business expenses necessary for an orderly liquidation. They have requested that an initial 200 Oceans be sold to American Lease by July 12 to generate $2.8 million for covering payroll and other expenses. However, before the sale can proceed, Fisker needs to resolve a problem with the water pumps on the Ocean, which will be handled by the remaining employees.
During an emergency hearing, concerns were raised about the speed at which Fisker’s lawyers were trying to push through the sale. The committee of unsecured creditors still does not have legal representation, and it was initially expected that a sale order would take weeks to be approved. However, Fisker’s lawyers argued against this notion, and a new hearing has been scheduled for July 11 to address these concerns.
Once the sale is complete, Fisker will have no obligation to repair or maintain the vehicles, and they will be sold “as is” with no warranties. Fisker will also provide American Lease with access to all relevant source code and proprietary software operating elements.
The inventory sale has been approved by Fisker’s largest secured creditor, Heights Capital Management. Heights loaned Fisker over $500 million in 2023, and the EV startup still owes nearly $190 million. The sale is expected to only pay off a fraction of Heights’ secured debt.
Despite objections from some parties, the sale of Fisker’s Ocean SUVs is moving forward. The outcome of the sale will determine the future of Fisker and its creditors, and there are concerns that it could lead to a more straightforward Chapter 7 liquidation.
