Fisker found itself in crisis mode towards the end of 2023 due to a rather unexpected issue: a temporary loss of visibility on customer payments, amounting to millions of dollars. This financial setback emerged at a critical juncture for Fisker, a once-prominent figure in the startup realm, achieving a remarkable $1 billion valuation in just four years post-establishment.

Losing Track: Customer Payment Crisis

Amid efforts to ramp up vehicle deliveries and sustain operations, Fisker faced production halts on its sole electric model as speculations surrounding bankruptcy circulated. The company's financial woes deepened as Nissan distanced itself from collaboration, shedding light on the challenges posed by the substantial losing track of customer payment.

TechCrunch's report revealed that as Fisker expanded its delivery operations, it faced a temporary setback in managing significant volumes of customer payments, prompting an extensive internal audit that commenced in December and lasted for several months.

Insights from sources familiar with the situation indicate that the EV startup managed to recover a substantial portion of the misplaced payments or re-request them from customers with expired payment methods.

However, the ensuing operational disarray described by these sources diverted crucial personnel and resources from Fisker's sales division precisely when the company was navigating a pivotal phase of business model restructuring. Challenges in tracking these transactions, encompassing both initial deposits and full vehicle payments, were attributed to deficient internal controls for monitoring such financial activities within Fisker.

Notably, instances were reported where vehicles were released without securing any form of payment, underscoring the complexities associated with managing customer payments effectively within the organization. In the quest to recover missing customer payments, Fisker faces stark challenges that extend beyond financial reconciliation.

The company finds itself perilously close to bankruptcy, as evidenced by its decision to halt production of the Ocean SUV, its sole vehicle, due to complications in meeting internal sales targets and addressing a myriad of quality issues faced by customers.

READ MORE: Revolutionizing Affordable Mobility: Lease the Hyundai IONIQ 6 and Kona EV for Just $169/Month

Fisker's admission to investors regarding the potential inability to sustain operations without a significant capital injection underscores the critical juncture at which the EV startup currently stands. As per a report by Motor1.com citing insights from TechCrunch's discussions with undisclosed sources familiar with the situation, deficiencies in Fisker's financial protocols resulted in the release of vehicles without securing corresponding payments.

The investigation indicates that the company grappled with monitoring both initial down payments and transactions for fully paid vehicles, necessitating a redirection of resources from the sales team to address the discrepancies. An individual interviewed for the report highlighted instances where checks were misplaced and not promptly processed, leading to post-delivery efforts by employees to reconcile payments.

TechCrunch also highlighted early warning signals, including Fisker's acknowledgment of internal accounting challenges in November of the preceding year. Despite indications of corrective actions, the lingering effects of these financial oversights may pose a significant threat to the brand's future prospects.

Fisker's Growing Dilemma

MotorTrend's report reveals that Fisker faced a stock suspension following the collapse of negotiations to secure a strategic partnership with a prominent automaker. The past several months have been tumultuous for Fisker, marked by efforts to secure funding through discussions with a significant player in the automotive industry.

Initial reports from Automotive News suggested Nissan as a potential partner for Fisker's Alaska electric truck project. However, CNBC's latest update indicates that these negotiations faltered, leaving Fisker without a critical investment injection and devoid of a partnership. The company currently finds itself in default concerning an $8.6 million interest payment, which was deferred during the partnership talks.

Although Fisker has not formally declared bankruptcy, the situation seems increasingly unfavorable based on recent developments.

RELATED ARTICLE: Polestar 3 Offers Surprising Price Reduction Months Before Scheduled Deliveries

Copyright @ MOTORTIMES, All rights reserved. Do not reproduce without permission.