The Austrian subsidiary of electric vehicle maker Fisker has initiated reorganization proceedings, a move akin to Chapter 11 bankruptcy protection in the United States. This development follows the pause in production of the Fisker Ocean SUV by contract manufacturer Magna Steyr.
Austrian Restructuring Underway
Fisker Austria has voluntarily filed for a restructuring proceeding under the Austrian Insolvency Code, allowing the entity to continue operations under court protection. This includes the ability to pay employees and sell existing vehicles. The company stated that this self-administered restructuring will enable Fisker Austria to protect its business while pursuing a value-maximizing strategic transaction or asset sale.
According to the company’s statement, other Fisker entities are not part of these Austrian proceedings and are expected to operate normally. Fisker Austria also intends to continue delivering vehicles to customers, provide service, and update over-the-air software during the restructuring process.
Mounting Financial Pressures
Fisker’s financial challenges have intensified in recent months, with a significant build-up of unsold Ocean EVs reaching over 4,000 units. The company previously paused production in March. Its latest 10-K filing with the Securities and Exchange Commission revealed approximately $50 million in remaining cash. Last year, Fisker reportedly spent around $70 million per month on average, suggesting a potential cash shortfall by the end of May if expenditures remain constant.
The company had previously indicated it would pursue Chapter 11 bankruptcy protection if it failed to secure additional funding.
Magna Steyr Production Impact
Magna Steyr, based in Graz, Austria, has been the contract manufacturer for the Fisker Ocean since November 2022, producing approximately 11,000 units. Production was halted earlier this week after Fisker decided to pause its sole vehicle program due to mounting inventory. Initially, Fisker had projected an annual production of 20,000 to 23,000 Ocean crossovers.
Magna Steyr also assembles vehicles for other major automakers, including BMW, Jaguar, and Mercedes-Benz. The discontinuation of several models by the end of the year, coupled with the Fisker production halt, has led Magna to lay off 500 workers at the Graz facility.
Fisker’s “asset-light” manufacturing strategy aimed to reduce costs and capital expenditures by relying on contract manufacturers to focus on design and technology. However, reports suggest customer experience has been a point of concern for Fisker owners.