Yahoo Autos Fisker Recalls Ocean EV Days before Company Files for Bankruptcy
Fisker recalled 6864 Ocean SUVs earlier this month, days before filing for Chapter 11 bankruptcy protection late Monday.
The recall concerns a loss of drive power in the Motor Control Unit which can be fixed via an over-the-air update.
According to the filing, the company is working with stakeholders regarding debtor-in-possession financing and the sale of Fisker's assets.
On Monday, Fisker joined Lordstown Motors as the second electric vehicle maker to file for Chapter 11 bankruptcy protection in the last year. News of the filing came less than two weeks after Fisker recalled most if not all Ocean SUVs (totaling 6864 vehicles) from the 2023 model year due to an issue regarding the Motor Control Unit (MCU). The Ocean is the only Fisker model in production and on sale.
"Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently," the company wrote in a prepared statement on Monday. "After evaluating all options for our business, we determined that proceeding with a sale of our assets under Chapter 11 is the most viable path forward for the company."
According to the automaker's statement, a previously announced manufacturing pause will remain in effect for an unknown amount of time. The company is hoping to continue reduced operations, including "paying employee wages and benefits, preserving certain customer programs, and compensating needed vendors on a go-forward basis," while it sells off assets and works to restructure its debt.
Fisker was launched (or relaunched) in Manhattan Beach, California, in 2016 by automotive designer Henrik Fisker, who has since served as the company's chairman and CEO. After an initial public offering in 2020, the company received a warning from the New York Stock Exchange earlier this year when its stock dipped below $1. In February, Fisker cut 15 percent of its workforce while offering a bleak outlook on the company's future. The initial layoffs were followed by a pause in production and huge slashes to the pricing of the Ocean SUV as the company desperately sought funds. According to Fisker's Chapter 11 announcement, Fisker Inc. and other United States subsidiaries, as well as subsidiaries outside the U.S., are not currently included in the bankruptcy filing.
Fisker's recall of all 2023 Ocean SUVs was reported to the National Highway Traffic Safety Administration (NHTSA) on June 5, less than two weeks before the company filed for Chapter 11 protection. The recall stems from a software issue in the MCU and the Vehicle Control Unit (VCU), which may cause the Ocean to unexpectedly enter a fail-safe mode, resulting in a loss of drive power.
Documents associated with the recall show that 100 percent of the recall population is estimated to have defective MCU and VCU software. The car may automatically shift from Drive to Neutral to Park when coming to a stop and must be power-cycled to resolve the issue. The automaker will fix the problem with an over-the-air update to both the MCU and the VCU.
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