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Electric vehicle startup Fisker has requested approval from a Delaware bankruptcy court judge to sell its remaining inventory of Ocean SUVs at a significant discount. The company, which filed for Chapter 11 bankruptcy protection in June, aims to offload 3,321 electric vehicles to New York-based American Lease for $46.25 million, averaging approximately $14,000 per vehicle.
This proposed sale price represents a dramatic reduction from the Ocean's original starting price of around $70,000 for some variants. The steep discount reflects Fisker's urgent need to generate capital amidst its financial struggles. Prior to declaring bankruptcy, the company had already slashed prices to as low as $25,000 in an attempt to meet debt obligations.
American Lease, which primarily serves ride-hail drivers in the New York City area, initially agreed to purchase 2,100 Ocean EVs on May 30, just two weeks before Fisker's bankruptcy filing. The leasing company later expanded its offer to acquire all 3,321 North American-configured Oceans ready for sale.
If approved, the sale could become a contentious issue in Fisker's bankruptcy proceedings. Lawyers representing unsecured creditors have expressed concerns about their ability to recover funds from such sales. Fisker reportedly owes approximately $1 billion to its unsecured creditors.
The proposed deal includes specific terms regarding vehicle condition and pricing. American Lease would pay $16,500 for vehicles in good working order, $3,200 for previously-titled vehicles, and $2,500 for damaged units. The agreement also stipulates that Fisker would have no further obligations for vehicle repair or maintenance after the sale, with the EVs being sold "as is" without warranties.
Fisker's largest secured creditor, Heights Capital Management, has endorsed the inventory sale. Heights, an affiliate of Susquehanna International Group, loaned Fisker over $500 million in 2023 and is still owed nearly $190 million.
The outcome of this proposed sale could significantly impact the trajectory of Fisker's bankruptcy case. Some legal representatives have suggested that following the inventory liquidation, the case might transition to a Chapter 7 liquidation, potentially leaving unsecured creditors with even less recourse.
As Fisker awaits the court's decision, the proposed sale underscores the dramatic shift in the company's fortunes since its ambitious entry into the competitive electric vehicle market.
