Fisker Inc., or as it was originally known, Fisker Automotive, is a name synonymous with ambitious ventures in the electric vehicle (EV) sector. Founded by Henrik Fisker, a celebrated automotive designer formerly of Aston Martin, and his wife Geeta Gupta-Fisker, the Fisker Car Manufacturer story is one of innovation, high hopes, and ultimately, significant setbacks in the competitive world of electric vehicles.
The initial endeavor, Fisker Automotive, was launched in 2007. This iteration of the Fisker car manufacturer primarily became known for producing the Fisker Karma, a striking plug-in hybrid luxury car. However, the journey of the Karma and Fisker Automotive was short-lived. The company faced financial headwinds and ultimately declared bankruptcy in 2013. An interesting anecdote from this era is that in 2012, pop star Justin Bieber received a Fisker Karma as an 18th birthday gift, presented live on the Ellen DeGeneres Show, highlighting the early buzz and appeal surrounding the brand. Despite the early promise, Fisker Automotive couldn’t sustain its operations.
Undeterred by the initial failure, Henrik Fisker resurrected the dream, launching Fisker Inc. in 2016. This new chapter for the Fisker car manufacturer began with grand plans, most notably the introduction of the Fisker Ocean SUV. The Ocean was envisioned as the flagship model in a lineup of four vehicles, intended to compete across various segments of the automotive market, including sports cars, compact vehicles, and even pick-up trucks. However, Fisker Inc. encountered significant challenges. Sluggish sales figures, workforce layoffs, and mounting scrutiny from the National Highway and Traffic Safety Administration (NHTSA) due to safety concerns plagued the company. Ultimately, mirroring its predecessor, Fisker Inc. also succumbed to financial pressures and declared bankruptcy this past summer, marking a second major failure for the Fisker car manufacturer brand.
Image alt: Justin Bieber receiving a Fisker Karma on the Ellen show, showcasing early brand recognition for Fisker.
Further complicating matters is a recent development concerning the sale of Fisker’s remaining vehicle inventory. American Lease, the company that agreed to purchase Fisker’s remaining stock of 3,000 vehicles for $40 million, is now facing a critical obstacle. A technical issue has emerged that prevents the transfer of crucial vehicle data to a server outside of Fisker’s control. This data access is essential for American Lease to effectively operate and service these vehicles once Fisker is officially dissolved. The inability to migrate this data has cast serious doubt on the completion of the fleet sale, which was a key component of Fisker’s bankruptcy plan.
TechCrunch recently reported that American Lease claims Fisker only disclosed the potential data transfer issue in early October, and subsequently confirmed the impossibility of data migration the following week. This revelation has led American Lease to file a formal objection to the court’s approval of Fisker’s Chapter 11 bankruptcy reorganization plan. The funds from the American Lease deal were intended to finance Fisker’s bankruptcy proceedings, placing the entire process in jeopardy.
DOJ Challenges Fisker’s Bankruptcy Plan Amidst Customer Woes
Beyond the fleet sale complications, the bankruptcy of the Fisker car manufacturer has created significant problems for its customers. Prior to ceasing operations, Fisker had sold approximately 8,000 Ocean SUVs. Many of these vehicles were reportedly plagued with issues from the outset, including complaints of power loss, braking problems, and erratic warning lights, triggering multiple NHTSA investigations.
While Fisker claimed that some problems were addressed through over-the-air software updates, others required physical repairs, necessitating visits to service centers for recalled part replacements. However, with the Fisker car manufacturer in bankruptcy, the availability of service and support for owners became uncertain.
According to Fisker’s website, a network of 23 authorized repair shops across 13 US states and additional locations in Canada and Europe were still operational at the time of writing. Fisker stated it would cover the costs of parts for two specific recalls – outer door handles and electric water pumps. However, vehicle owners are responsible for covering labor costs associated with these repairs. A FAQ section on Fisker’s website explained that while bankruptcy proceedings allowed for funding of service parts, labor cost funding was unavailable, although the company was purportedly seeking solutions.
Image alt: A silver Fisker Ocean SUV, representing Fisker car manufacturer’s flagship vehicle facing bankruptcy complications.
This approach by Fisker has drawn criticism from the Department of Justice (DOJ). Representing the NHTSA, DOJ officials filed a statement asserting that Fisker’s plan violates the National Traffic and Motor Vehicle Safety Act. This act mandates that vehicle manufacturers must remedy defects or noncompliance issues “without charge to the consumer,” which may encompass vehicle repair, replacement with a comparable vehicle, or purchase price refunds. The DOJ’s stance adds further legal pressure to the already troubled Fisker car manufacturer bankruptcy proceedings.
Customer Legal Options Emerge Against Fisker Financiers
Despite the bankruptcy shielding Fisker itself from direct lawsuits, legal avenues may exist for disgruntled Fisker car owners. Steve Berman, managing partner at Hagens Berman law firm, suggests that the Holder Rule could provide recourse for customers. This rule stipulates that a vehicle financier involved in promoting the vehicles can be held liable to the same extent as the car manufacturer.
Berman stated that claims related to “Lemon laws,” breach of contract, warranty breaches, misrepresentation, or consumer protection act violations that could have been directed at Fisker, can now potentially be pursued against the financing institution, in this case, J.P. Morgan Chase Bank, which financed many Fisker Ocean purchases.
Hagens Berman has initiated legal action against J.P. Morgan Chase Bank’s North American division on behalf of over 800 Fisker Ocean owners. The firm has outlined a process for owners to join the lawsuit, involving contacting the firm, signing a retainer agreement, and agreeing to arbitration. Arbitration proceedings, which are generally faster than traditional court cases, will be held near the client’s location and may require client testimony regarding their EV purchase and related problems.
Berman characterizes the case against Fisker as “unique” due to the multiple potential resolution paths. Customer complaints largely center on the “significant” problems arising from the bankruptcy, including lost warranty protection, persistent software issues, lack of software updates, and compromised internet access and safety features. Potential resolutions being explored include loan relief, cash settlements, or vehicle buy-back arrangements. Should the legal efforts prove unsuccessful, clients bear no financial risk, with the Hagens Berman firm covering all associated expenses. Meanwhile, American Lease remains focused on ensuring they receive the necessary vehicle data to justify their $40 million investment, adding another layer of complexity to the ongoing saga of the Fisker car manufacturer.
