Commentary: Big Tent Ideas

DAVID BLACKMON: Bonfire Of The E-Vanities: Bankrupt EV Start-Up Fire-Selling Remaining Inventory

An electric vehicle getting charged.

Hey, want a cheap Fisker Ocean EV? Want a bunch of them? All you need is $2,500 in cash for a few hundred of Fisker’s remaining inventory of damaged Ocean SUVs, and they are yours!

Bankrupt pure-play battery electric-vehicle maker Fisker, desperate to raise cash to keep what remains of its operations open as it goes through the Chapter 11 bankruptcy process, is about to enter into a deal with a wholesale buyer to dump its remaining inventory of what is a really good-looking, high-quality SUV, designed to compete with the Tesla Model-Y sort-of SUV car that is really just a souped-up sedan.

You may remember that, earlier in the year, Fisker cut the price for the Ocean by 40% from its original $58,000 price tag to try to spur sales amid a faltering market. But even at $36,000 or so, the carmaker was unable to offload enough of the things to avoid bankruptcy.

So, now, according to Inside EVs, Fisker is about to do a deal with American Lease to sell undamaged models for $16,500, previously owned but undamaged units for $3,200, and the damaged units for just $2,500. Fisker is willing to enter into the deal to raise $46.25 million to help pay off its massive debts.

Fisker says in court documents it has 2,711 undamaged models on hand, which it describes as being in “reasonably good working order” and having a “Manufacturer’s Certificate of Origin.” Those are the units that fetched the highest price from American Lease. An inventory of 3,211 “previously titled” vehicles obtained the $3,200 price with the remainder being basically sold for parts value.

This move by Fisker is reflective of several features of the currently failing U.S. EV market:

• Surveys continue to show that the vast majority of U.S. car buyers will not purchase an EV even at bargain basement prices discounted 40% off of retail.
• The overall growth in EV sales in the U.S. has slowed to a trickle, just as is happening in the UK and EU now.
• The market for used EVs is near zero.
• The EV industry in the U.S., whose beginnings can be traced back to 1886, still has failed to solve the same infrastructure and technology issues that have plagued it since the start.

When I wrote about this event at my Substack, one reader sarcastically replied: “Toss in a fire extinguisher and I’m in” — referring to the tendency of EV batteries to just spontaneously combust for no apparent reason. This is just another chronic issue the industry itself has proved unable to adequately address.

Another reader asked what reasonable car buyer is going to want a car whose manufacturer may be going out of business and for which parts may no longer be available in a few years? Presumably, American Lease and Fisker will reach some arrangement addressing this concern, but it is a completely valid one.

What buyer is going to be willing to assume that risk even at bargain basement prices?

In fact, that concern is not just valid as it relates to Fisker but every other pure-play EV maker in America whose name is not Tesla. Fisker was just the most recent in a string of bankruptcies in that sector, and as I pointed out a few weeks ago, the remaining non-Tesla EV pure plays all appear to be in financial trouble.

If the overall EV market were still growing rapidly as it did from 2021 through early 2023, this would not be happening. But that growth has slowed to a near standstill recently, as consumers have grown more aware of the EV industry’s chronic limitations and issues. It is difficult to see how that turns around any time soon.

This concurrence of unfortunate events and market factors means we should expect to read similar stories to this one about pretty much every other remaining pure play EV maker in the U.S. other than Tesla in the coming months.

It all seems so inevitable.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

(Featured Image Media Credit: Screen Capture/PBS NewsHour)