Fisker to Halt Production for Six Weeks due to Deteriorating Business Conditions

American electric vehicle startup Fisker announced on March 18, 2024, that it will halt production for six weeks. The company cited deteriorating cash flow and the need to prevent inventory build-up as reasons for the halt. It also added that it is currently in alliance negotiations with major automakers and focusing on avoiding bankruptcy.

Fisker clarified that the production halt is temporary and would prevent a cash flow deterioration due to inventory build-up. So far this year, it has produced approximately 1,000 units, and when combined with the carryover from last year, it reportedly has an inventory of 4,700 units.

On the 18th, it announced plans to sell convertible bonds at a 10% discount rate to raise to $150 million. In documents submitted to the U.S. Securities and Exchange Commission (SEC), Fisker explained that the convertible bonds would be sold to existing investors.

Fisker outsources its production to Canada’s Magna International and is not eligible for the IRA subsidy in the North American market.

The U.S. market’s slowdown in electric vehicle sales is hitting small-scale Fisker. On March 18, Fisker’s stock price dropped more than 14% at one point compared to the closing price last weekend. This is more than a 90% decrease compared to the end of 2023.