Is the Fisker Ocean EV Officially Sunk?

• Contract manufacturer Magna Steyr, which assembles the Ocean in Austria, said in its 2024 outlook that it assumes no further production of the SUV will take place.

• Fisker's Austrian unit has filed to open a restructuring proceeding through self-administration, with other units unaffected.

• Just weeks ago, Fisker's US unit said it could seek bankruptcy protection as soon as this month.

As the fate of Fisker hangs in the balance, with the EV maker having hinted in recent weeks that it could seek bankruptcy protection as soon as this month, it's important to note that it isn't just Fisker with a financial stake in the Ocean SUV.

The all-electric Ocean had entered production in Graz, Austria, in 2023, with contract manufacturer Magna International conducting the actual assembly at its Magna Steyr plant. So the industrial base for the model and the assembly line employees are Magna's.

The EV startup, which is headquartered in California, revealed this week that its Austrian unit has filed to open a restructuring proceeding through self-administration according to Austrian Insolvency Code.

"The proceeding will enable Fisker Austria to ensure its operations are able to continue under court protection, including paying employees and selling vehicles," Fisker said in a statement, adding that it plans to keep delivering vehicles to customers and release software updates, as least as long as it can do so.

Fisker noted that its other entities—mainly in the US—are not affected by this development in Europe. But during the fourth week of April Fisker warned in a filing with the SEC that it could seek bankruptcy protection in the US within 30 days.

Magna, meanwhile, has hinted in recent days that it expects Ocean production to have already concluded.

"Our current Outlook assumes no further production of the Fisker Ocean," Magna said in a footnote to its Q1 2024 results, with production currently idled.

The contract manufacturer also indicated that it recorded restructuring expenditures and asset impairments, or permanent reduction in the value of an asset, related to Fisker that amounted to $316 million, and that it was also exposed to third-party obligations of about $75 million related to Ocean production, referencing outside suppliers of parts.

Months prior, Fisker was warning investors that it could run out of cash by the end of 2024, but this trend appears to have accelerated in recent months, even as Fisker said it was in talks with a major automaker.

A week ago Fisker was still hinting that it was talking with four automakers, but a major investment deal that would bail out the company did not materialize.

More recently, Fisker had dramatically slashed prices on undelivered 2023 Oceans, seeking to clear out unsold units from the previous model year to shore up its cash reserves. But the company has not indicated just how successful this campaign was.

It remains to be seen whether Fisker will be able to salvage its finances at the eleventh hour as EV demand shows signs of cooling off, even putting established EV makers like Tesla under pressure.

Should Fisker have launched an EV model in a different segment as its first vehicle? Let us know in the comments below.