2 months ago
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As EV startup Fisker prepares to enter the fourth month of its Chapter 11 bankruptcy process, existing owners have received some bad news: they will have to pay labor costs to resolve two of the five outstanding recalls on their Ocean SUVs.
Fisker broke the bad news Sunday night in an FAQ posted to its website. The company said three of the five recalls — one for sudden loss of power, one for incorrectly displayed warning lights, and one for reduction in regenerative breaking — can be resolved with over-the-air software updates at no cost.
The other two recalls are where the trouble comes in. Some of the Oceans have faulty door handles. And all of the SUVs need an electric water pump replaced, which was causing some vehicles to lose power. Fisker said it will cover the cost of the parts, but that owners will have to pay for the inspection and repair process at an authorized service provider. (The company said it will send owners a list of these providers by “the end of September 2024.)
This all comes after Fisker recently reached a settlement plan with its biggest secured lender, the committee of unsecured creditors, contract manufacturer Magna, and other parties involved in the bankruptcy. After a few months of back-and-forth, which occasionally got heated, the parties agreed on how to split up the proceeds of a liquidation of Fisker’s assets. The judge in the case has set a hearing for early October where that settlement plan might be approved.
The company already inked a sale of virtually all of its remaining vehicle inventory to New York vehicle leasing company American Lease for up to $46.25 million. Now it has to liquidate its remaining assets — allegedly more than $1 billion worth, largely consisting of manufacturing equipment that was used at Magna’s factory in Austria — in order to pay back its many creditors.
