Henrik Fisker’s second automotive startup, Fisker Inc, is on the brink of bankruptcy, according to multiple former and current workers. The company was initially positioned as a rival to Tesla, but employees claim that mismanagement and cutting corners led to a multitude of problems. Business Insider spoke with 27 individuals who shed light on the startup’s downfall.
The issues with Fisker’s electric vehicles (EVs) began before they even hit the road. In June 2023, as the company prepared to deliver its first batch of cars, employees rushed to fix faulty parts on several vehicles, even stripping parts from the CEO and CFO’s personal cars for repairs, according to sources familiar with the incident. Some of these vehicles experienced malfunctions shortly after delivery.
Many of Fisker’s problems can be attributed to the mismanagement of its husband-wife duo, Henrik Fisker and Geeta Gupta-Fisker. Gupta-Fisker, who had no prior experience in the automotive industry, made decisions to use cheaper components that didn’t meet the correct specifications for the Ocean SUV. These mismatches led to issues with over-the-air updates.
Workers reported that they raised concerns about the need for further testing and development before the vehicle’s release, but the company pushed forward regardless. This focus on getting the car to market quickly resulted in a lack of adequate systems for processing repair orders and warranty claims, leading to further problems.
Fisker also faced challenges in terms of sales and customer satisfaction. Negative reviews, including one from YouTuber MKBHD calling the Ocean the “worst car I’ve ever reviewed,” led many potential customers to cancel their reservations. To counter this, Fisker hired recruiters with no automotive sales experience to help sell the vehicle, resulting in confusion and duplicated calls to customers.
Furthermore, Fisker engaged in pop-up events to boost sales, sometimes without obtaining proper permission from locations. Some customers who had canceled their orders received delivery of the vehicle anyway, and Fisker temporarily lost track of millions of dollars in customer payments.
The company’s stock fell drastically, and it warned employees that they would be laid off if a buyer or additional investor was not found soon. Currently, Fisker’s workforce is less than 100 people, with remaining employees focused on offloading the company’s remaining inventory.
The situation at Fisker highlights the importance of effective management, thorough testing, and proper communication with both employees and customers. Mismanagement and rushing products to market can have severe consequences, especially in the competitive EV industry. For Henrik Fisker, finding a buyer or cash infusion is crucial to salvage his reputation and avoid back-to-back bankruptcies.