Enlarge/ Fisker CEO Henrik Fisker introduces the all-electric compact hatchback Pear during its inaugural “Product Vision Day” in Huntington Beach, California, on August 3, 2023.
It was the last week in June, and José De Bardi hadn’t gotten much sleep. The trouble had really kicked off on June 18, about a week earlier, when the electric vehicle company Fisker announced it had filed for bankruptcy protection. Now some 6,400 Fisker owners like De Bardi wondered: What will happen to their cars in the future?
The bankruptcy “lit a fire,” De Bardi says. “We had to get organized if we had any chance of representing owners’ interests.” Within days, he and a handful of other Fisker vehicle owners had established a nonprofit organization called the Fisker Owners Association, dedicated to keeping their cars running. (Hence, the lack of sleep.) By the end of the month, 1,200 owners—representing nearly a fifth of total Fisker cars sold—had registered through the group’s website, De Bardi says.
Fisker vehicle owners’ questions are mostly practical. Fisker began shipping the Ocean, its electric SUV—priced to start at $41,000 and ranging up to $70,0000—last year. Immediately, the vehicles were found to have serious build quality shortcomings and software issues, including a less-than-responsive central touchscreen. (WIRED’s reviewer declined to rate the vehicle entirely, calling it “just not ready yet.”)
Owners reported that some of the most serious issues, including a difficult-to-use brake hold and Bluetooth connectivity problems, were ironed out through software updates. But owners sometimes complained that it was tricky to get their vehicles serviced or repaired, because there weren’t enough certified Fisker repairers and technicians. Fisker initially launched with a Tesla-like “direct to consumer” model that eschewed the traditional “middleman” dealerships often seen in the US. But in January, the company began to sign dealerships to a new Fisker network, citing ballooning costs associated with the direct model.
Ownership woes
Even now, as the carcass of Fisker gets picked over, the EVs still have niggling problems—window cracks, dysfunctional key fobs, sudden connectivity blackouts—and will unquestionably need servicing and spare parts to keep them running into the future. Without Fisker, the company, to provide that, what are owners to do?
The FOA is still in the early stages of figuring it out. A small band of volunteers have worked around the clock to define the problems owners might face down the road—legal questions about their vehicle financing; issues with the car’s app; finding parts—and start solving them. These people have full-time jobs, too. De Bardi, for example, who lives in the UK and has headed up the European owners’ efforts, is also the CTO of a telecommunications firm.
Experts say Fisker owners’ situation is looking increasingly tricky. Automotive companies have a playbook to handle bankruptcies, developed during the 2008 financial crisis, which led General Motors and Chrysler to file for Chapter 11 protection, as Fisker has. Thanks in part to support from the US government, those automakers were able to honor their vehicles’ warranties as the companies restructured.
But in legal proceedings in Delaware this month, Fisker’s situation looked more dire. Lawyers for the firm’s creditors argued that Fisker should have filed for bankruptcy late last year. And Fisker plans to sell its remaining inventory, some 4,000 vehicles, to a firm that leases electric vehicles to New York City Uber and Lyft drivers, lawyers told the court.
If the company is forced to liquidate this way, owners may not be top of mind for the court and Fisker’s creditors, says John A.E. Pottow, a professor of law who studies bankruptcy at the University of Michigan Law School. The company may simply not have enough money to honor its vehicles’ warranties. “If Fisker is bankrupt, they have no obligation to update their software,” he says. And the company’s assets—its cars, their parts, and its intellectual property—may be too piddling to attract another firm to take up the mantle of service and repair. “Bankruptcy is never good,” Pottow says. “The smaller the business, the worse the issues.”
Right now, Fisker owners should make sure they have great comprehensive insurance on their cars, says Justin Simard, an associate professor of law researching commercial law at Michigan State University College of Law. Without a functioning service and repair system, “you could get totaled out with a little fender bender,” he says. The worst-case scenario might also see Ocean insurance rates increase and the cars’ resale values plummet even further, he says.
Fisker spokesperson Matthew Debord declined to comment on issues related to vehicle repair and parts manufacture, and referred WIRED to the company’s statements related to its Chapter 11 bankruptcy.
Fisker initially paused production of the Ocean in February, after warning investors it might not be able to see out the year. A month later, reported investment talks between the electric vehicle maker and Nissan collapsed, and the fate of Fisker became clearer. The automaker brought in some $273 million in revenue last year but lost $940 million and owes some $850 million to bondholders.
A handful of other electric vehicle makers, including Lordstown Motors, Arrival, and Volta Trucks, have also filed for bankruptcy amid a more-challenging-than-expected climate for electric vehicles and new vehicle development. A fleet maintenance firm agreed to provide service for Lordstown’s remaining fleet customers, while the assets of Arrival sold to another EV manufacturer, Canoo. Volta Trucks emerged from restructuring earlier this year with new ownership and says it will continue to manufacture vehicles.
Despite it all, José De Bardi, the Fisker Owners Association leader, says he wants to keep his black Fisker Ocean around for as long as he possibly can. “It’s now a fantastic car,” he says, acknowledging the EV’s initial “quirks.” Despite the challenges—and hard work—the group is feeling optimistic. “We’re feeling positive that we’re going to get some kind of good outcome,” he says.
Clint and Rachel Wells had reasons to consider buying an electric vehicle when it came to replacing one of their cars. But they had even more reasons to stick with petrol.
The couple live in Normal, Illinois, which has enjoyed an economic boost from the electric vehicle assembly plant opened there by upstart electric-car maker Rivian. EVs are a step forward from “using dead dinosaurs” to power cars, Clint Wells says, and he wants to support that.
But the couple decided to “get what was affordable”—in their case, a petrol-engined Honda Accord costing $19,000 after trade-in.
An EV priced at $25,000 would have been tempting, but only five new electric models costing less than $40,000 have come on to the US market in 2024. The hometown champion’s focus on luxury vehicles—its cheapest model is currently the $69,000 R1T—made it a non-starter.
“It’s just not accessible to us at this point in our life,” Rachel Wells says.
The Wells are among the millions of Americans opting to continue buying combustion-engine cars over electric vehicles, despite President Joe Biden’s ambitious target of having EVs make up half of all new cars sold in the US by 2030. Last year, the proportion was 9.5 percent.
High sticker prices for cars on the forecourt, and high interest rates that are pushing up monthly lease payments, have combined with concerns over driving range and charging infrastructure to chill buyers’ enthusiasm—even among those who consider themselves green.
Financial Times
While EV technology is still improving and the popularity of electric cars is still increasing, sales growth has slowed. Many carmakers are rethinking manufacturing plans, cutting the numbers of EVs they had planned to produce for the US market in favor of combustion-engined and hybrid cars.
Electric vehicles have also found themselves at the intersection of two competing Biden administration priorities: tackling climate change and protecting American jobs.
Biden has pledged to lower US greenhouse gas emissions to 50-52 percent below 2005 levels by 2030, with widespread EV adoption a significant part of that ambition.
But he wants to achieve it without recourse to imports from China, the world’s biggest producer of EVs and a dominant player in many of the raw materials that go into them. Washington has set out an industrial policy that hits Chinese manufacturers of cars, batteries and other components with punitive tariffs and restricts federal tax incentives for consumers buying their products.
The idea is to allow the US to develop its own supply chains, but analysts say such protectionism will result in higher EV prices for US consumers in the meantime. That could stall sales and result in the US remaining behind China and Europe in adoption of EVs, putting at risk not only the Biden administration’s targets but also the global uptake of EVs. The World Resources Institute says between 75 and 95 percent of new passenger vehicles sold by 2030 need to be electric if Paris agreement goals are to be met.
Enlarge/ Rivian electric vehicles on the assembly line at the carmaker’s plant in Normal, Illinois. Its focus on luxury vehicles means many families cannot afford its cars.
Brian Cassella/Chicago Tribune/Getty Images
“There is no question that this slows down EV adoption in the US,” says Everett Eissenstat, a former senior US Trade Representative official who served both Republican and Democratic administrations.
“We are just not producing the EVs the consumers want at a price point they want.”
Incenting consumers
The administration is attempting to reconcile its industrial and climate policies by offering tax incentives to consumers to buy EVs and by encouraging manufacturers to develop US-dominated supply chains.
Tax credits of up to $7,500 are available to buyers of electric cars. But the full amount is only available on cars that are made in the US with critical minerals and battery components also largely sourced in the US.
That means few cars qualify for the maximum credit. Two years on from the passage of the Inflation Reduction Act, which set out Biden’s ambitious green transition strategy, there are only 12 models that can actually score buyers the full $7,500.
The act also offered hundreds of billions of dollars in subsidies and other incentives to companies building a domestic clean energy industry. The automotive sector has been one of the beneficiaries of that largesse.
Last month, the Biden administration went a step further, adding steep new tariffs on billions of dollars of goods imported from China. These included a quadrupling of the tariffs on imported electric vehicles, a tripling of the rate on Chinese lithium-ion batteries to 25 percent and the introduction of a 25 percent tariff on graphite, which is used to make batteries.
The levies were an extension of a package first imposed by then president Donald Trump as part of his trade war with Beijing in 2018, and have been under review by the Biden administration as it figures out how to respond to what it says are Beijing’s unfair subsidies to strategic industries.
Enlarge/ Joe Biden with union members last month as the president approved a rise in tariffs on Chinese-made goods, including a quadrupling of the levies imposed on imported EVs.
Mandel Ngan/AFP/Getty Images
Few Chinese EVs are available for sale in the US. Polestar is the only Chinese-owned carmaker currently active in the country and it sold a mere 2,210 cars in the first quarter—out of nearly 269,000 new EV sales. (The company plans to add manufacturing in the US this year.)
Wendy Cutler, a former trade official and vice-president of the Asia Society Policy Institute, describes the pre-emptive levying of tariffs as a new development in global trade policy.
“This sends a clear signal to China: don’t even think about exporting your cars to the United States,” she says.
More significant than the tariffs on Chinese electric cars are the levies on lithium-ion batteries and the materials and components used to make them.
China is a key player in the supply chain for EV batteries, with companies such as BYD and CATL developing the country’s capacity over more than a decade. It dominates the processing of the minerals contained in lithium-ion batteries as well as the manufacture of battery components such as cathodes and anodes.
According to data analyzed by the Center for Strategic and International Studies (CSIS), a Washington think-tank, US-based carmakers have been importing a growing share of their batteries from China. In the first quarter of 2024, more than 70 percent of imported car batteries came from the country.
The tariffs will drive up manufacturing costs for carmakers in the US and that cost is likely to be passed on to consumers because battery materials and components are not currently available in large quantities from any supply chain that excludes China.
US trade officials draw parallels with the solar industry. The cost of photovoltaic panels fell worldwide as Chinese manufacturers, benefiting from subsidies, lower labor costs and growing scale, came to dominate the industry.
That has been a boon for consumers, but resulted in production and jobs shifting from the US to China. Washington does not want a rerun of this process in the automotive sector.
“The idea that we should just open our gates and have a bunch of systematic Chinese economic abuses . . . and that that’s the answer to climate change is incredibly naive and short-sighted,” says Jennifer Harris, a former economic adviser to Biden.
In an election year, the issue is politically charged too. Michigan and Ohio, both home to large numbers of auto workers, are swing states in the presidential election. Both Biden and Republican nominee Donald Trump are trying to appeal to working-class voters there.
Preserving jobs in the US auto industry as it moves towards green technology is largely about the supply chain. More than half the 995,000 people employed in the auto industry across the US are making parts, rather than assembling vehicles, according to the Bureau of Labor Statistics.
EVs already threaten these jobs because their powertrains comprise fewer components than cars with traditional engines and transmission systems. The United Auto Workers union, arguing for a “just transition” to clean energy, fought during its six-week long strike last autumn to have battery plants in the US covered by the same contracts that protect workers at plants making petrol-powered vehicles, winning an agreement with General Motors.
Financial Times
Ilaria Mazzocco, chair in Chinese business and economics at CSIS, says the reduced competition and rising cost of imported battery components could delay price decreases for US consumers.
“It’s not just that the same car costs less in China, it’s that in China you have a wider variety,” says Mazzocco. “US automakers will have the leisure of not having competition, and they’ll be able to focus on making these high-cost trucks”—a reference to larger sedans and SUVs, which have bigger profit margins.
“That’s just what the Biden administration feels they need to do on the political front, because they need to prioritize jobs,” she adds.
Price and infrastructure
Electric vehicles face other barriers to mass adoption. Affordability, lack of charging infrastructure and range anxiety all remain concerns for mainstream US car buyers.
The price for a new EV averaged just less than $57,000 in May, compared with an average of a little more than $48,000 for a car or truck with a traditional engine.
The starting price for a Tesla Model Y, by far the most popular electric vehicle in the US, was just less than $43,000 during the first quarter. The Ford F-150 Lightning, the electrified version of the best-selling pick-up truck in the US, was teased at $42,000 when it went on sale in May 2022 but now starts at $55,000—more than $11,000 above the petrol-powered F-150.
Used EVs are cheaper, with a vehicle less than five years old costing about $34,000, according to Cox Automotive. But they remain more expensive than used cars with traditional engines, which average about $32,100—and they make up just 2 to 3 percent of used vehicle sales.
Enlarge/ esla Model Y vehicles at a dealership in Austin, Texas. Elon Musk has suggested that the carmaker would launch ‘more affordable’ models in the coming year or so.
Brandon Bell/Getty Images
Ford and Stellantis, which owns brands such as Dodge, Ram and Jeep, are promising $25,000 EVs for the US market in the next few years. General Motors plans to revive the Chevrolet Bolt as “the most affordable” EV on the market. Tesla chief Elon Musk also told investors in April that Tesla would launch “more affordable models” this year or early in 2025.
But these models will still face obstacles like a dearth of charging infrastructure. Overnight charging at home is the preferred method of replenishing an EV, but this is only really an option for those who can install a charger on their property. Those living in apartment complexes in states like California, where a greater share of people drive EVs, are more reliant on public charging facilities.
While there are about 120,000 petrol stations nationwide, according to the US Department of Energy, there are only 64,000 public charging stations in the US—and only 10,000 of them are direct current chargers, which can replenish a battery in 30 minutes rather than several hours. Charging stations also can be inoperative or have long lines when drivers arrive, forcing them to go elsewhere.
Potential buyers also worry their EV may not travel as far on a single charge as they require. While electric vehicles are well suited to the short trips that make up most driving, many Americans also use their cars and trucks for longer distances and worry that charging en route may add to their driving time, or even leave them stranded. Cold weather and towing a load can both diminish an EV’s range.
“What we’re seeing is the pace of EV growth is faster than the rate of publicly available charger growth,” says John Bozzella, chief executive of US auto trade group the Alliance for Automotive Innovation.
Two strategies
Many global carmakers are making big investments in US manufacturing plants, in response to the government’s incentives. But in the light of slowing EV sales growth they are shifting that investment towards hybrid vehicles, which use battery power alongside a traditional engine.
Last month, executives from GM, Nissan, Hyundai, Volkswagen and Ford all said that tapping into demand for hybrids was a priority. Ford chief executive Jim Farley told investors at a conference “we should stop talking about [hybrids] as a transitional technology,” viewing it instead as a viable long-term option.
Hyundai said it was considering making hybrids at its new $7.6 billion plant in Georgia. US competitor GM said in January that it would reintroduce plug-in hybrid technology to its range, though chief executive Mary Barra recently affirmed she still saw EVs as the future.
Bozzella says that even with the tariff protection measures and US subsidies in place, he was unsure how long it would take for the US auto industry to produce EVs that could compete with heavily subsidized Chinese vehicles on pricing.
“There is no question that EVs built in the US now, and built by American companies now, are absolutely competitive with EVs around the world,” he says, citing Tesla.
“If what you mean is competitive at price points . . . well that’s a different matter entirely, and my answer to that is: I’m not sure.”
Van Jackson, previously an official in the Obama administration and now a senior lecturer in international relations at Victoria University of Wellington in New Zealand, says electric cars still need to fall in price if the market is to grow substantially.
“How do you bring workers along and increase their wages, and have a growth market for these products, given how expensive they are?” he asks. “I’m an upper-middle-class person and I cannot afford an EV.”
He is skeptical about whether shutting the world’s dominant producer of EVs and related componentry out of the US market will reduce the price of the cars and encourage uptake.
“The tariffs are buying time,” he says. “But towards no particular end.”
Enlarge/ Car designer Henrik Fisker poses with a Fisker Ocean at the Salvation Army California South Division’s annual Sally Awards in June 2022.
Michael Tullberg/Getty Images
Fisker, the second EV firm started by legendary BMW and Aston Martin designer Henrik Fisker, has filed for bankruptcy and intends to sell its assets and restructure its debt. The almost inevitable outcome comes months after it paused manufacturing amid cash flow shortages, safety probes, and devastating reviews of its only product, the Fisker Ocean SUV.
Fisker’s statement about the filing notes the firm’s production of the Ocean “twice as fast as expected in the auto industry” and delivering “the most sustainable vehicle in the world.” However, a Fisker spokesperson writes, “[L]ike other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently.”
Rumors of Fisker’s bankruptcy have been circulating since March when the company suspended production of its Ocean for initially six weeks and then indefinitely. A month earlier, the company reported $273 million in 2023 sales but more than $1 billion in debt. Fisker’s stock was pulled from the New York Stock Exchange in late March. Amid what many saw as a generalized weakening of EV demand, Fisker was particularly vulnerable.
The Fisker Ocean, on display at Mobile World Congress in 2022.
YouTube tech reviewer and podcaster Marques Brownlee, who reviews cars on his Auto Focus channel, cut right to it: “This is the Worst Car I’ve Ever Reviewed.” Brownlee’s video pointed out disconcerting software issues, including an excessively slow response by the central display, irregular warning lights, and key fob issues. Fisker did itself no favors with its reaction to the video review, which involved trying to track down Brownlee’s borrowed Ocean and alternately chastising and cajoling the dealer who loaned it to him.
Brownlee posted on X (formerly Twitter) Tuesday that “everyone’s commenting that I killed them, but truth is they were doomed long before any of my videos.”
The second Fisker auto bankruptcy
Fisker is technically the second EV company started by Henrik Fisker to stall out of the gate. Fisker Automotive made the Fisker Karma, a plug-in hybrid (or “range extender”) sports GT, that broke down on Consumer Report’s test track before it could be actually tested and had a fire-risk recall. Fisker Automotive spent $1.4 billion making roughly 2,500 cars before it filed for Chapter 11 in 2013. This latest version of Fisker reported 6,400 vehicle deliveries by mid-April.
Fisker is seeking to sell its assets, worth between $500 million to $1 billion, with liabilities between $100 million–$500 million, according to its filing. The company, formed through a special purpose acquisition company (SPAC), contracted Canadian firm Magna to manufacture its cars. Adobe and Google are among its largest creditors.
Fisker said in its filing that in limited operations, it would work at “preserving certain customer programs.” No specifics about parts, warranty, or software updates were included. Ars reached out to Fisker to inquire about these items and will update the post with a response.
The resurrection of a car plant in Brazil’s poor northeast stands as a symbol of China’s global advance—and the West’s retreat.
BYD, the Shenzhen-based conglomerate, has taken over an old Ford factory in Camaçari, which was abandoned by the American automaker nearly a century after Henry Ford first set up operations in Brazil.
When Luiz Inácio Lula da Silva, Brazil’s president, visited China last year, he met BYD’s billionaire founder and chair, Wang Chuanfu. After that meeting, BYD picked the country for its first carmaking hub outside of Asia.
Under a $1 billion-plus investment plan, BYD intends to start producing electric and hybrid automobiles this year at the site in Bahia state, which will also manufacture bus and truck chassis and process battery materials.
The new Brazil plant is no outlier—it falls into a wave of corporate Chinese investment in electric vehicle manufacturing supply chains in the world’s most important developing economies.
Financial Times
The inadvertent result of rising protectionism in the US and Europe could be to drive many emerging markets into China’s hands.
Last month, Joe Biden issued a new broadside against Beijing’s deep financial support of Chinese industry as he unveiled sweeping new tariffs on a range of cleantech products—most notably, a 100 percent tariff on electric vehicles. “It’s not competition. It’s cheating. And we’ve seen the damage here in America,” Biden said.
The measures were partly aimed at boosting Biden’s chances in his presidential battle with Donald Trump. But the tariffs, paired with rising restrictions on Chinese investment on American soil, will have an immense impact on the global auto market, in effect shutting China’s world-leading EV makers out of the world’s biggest economy.
The EU’s own anti-subsidy investigation into Chinese electric cars is expected to conclude next week as Brussels tries to protect European carmakers by stemming the flow of low-cost Chinese electric vehicles into the bloc.
Government officials, executives, and experts say that the series of new cleantech tariffs issued by Washington and Brussels are forcing China’s leading players to sharpen their focus on markets in the rest of the world.
This, they argue, will lead to Chinese dominance across the world’s most important emerging markets, including Southeast Asia, Latin America, and the Middle East and the remaining Western economies that are less protectionist than the US and Europe.
“That is the part that seems to be lost in this whole discussion of ‘can we raise some tariffs and slow down the Chinese advance.’ That’s only defending your homeland. That’s leaving everything else open,” says Bill Russo, the former head of Chrysler in Asia and founder of Automobility, a Shanghai consultancy.
“Those markets are in play and China is aggressively going after those markets.”
Enlarge/ It’s a hefty plug, but it has to be so that an F-150 Lightning can send power back to the home through an 80-amp Ford Charge Station Pro.
Ford
Modern EVs have some pretty huge batteries, but like their gas-powered counterparts, the main thing they do is sit in one place, unused. The Ford F-150 Lightning was built with two-way power in mind, and soon it might have a use outside emergency scenarios.
Ford and Resideo, a Honeywell Home thermostat brand, recently announced the EV-Home Power Partnership. It’s still in the testing phases, but it could help make EVs a more optimal purchase. Put simply, you could charge your EV when it’s cheap, and when temperatures or demand make grid power time-of-use expensive (or pulled from less renewable sources), you could use your truck’s battery to power the AC. That would also help with grid reliability, should enough people implement such a backup.
The F-150 Lightning already offers a whole-home backup power option, one that requires the professional installation of an 80-amp Ford Charge Station Pro and a home transfer switch to prevent problems when the grid switches back on. Having a smart thermostat allows for grid demand response, so the F-150 would be able to more actively use its vehicle-to-home (V2H) abilities.
It’s one vehicle and one thermostat, but it’s likely just the start. General Motors’ latest Ultium chargers, installed with its 2024 EVs, will also offer bi-directional home charging. The 2024 GM EVs scheduled to implement V2H are generally pretty hefty: the Chevrolet Silverado EV RST, GMC Sierra EV Denali Edition 1, Chevrolet Equinox EV, Cadillac Escalade IQ, and the comparatively smaller Cadillac Lyriq.
Ford and GM are also partnering with Pacific Gas and Electric (PG&E) to research bi-directional charging programs. Beyond a single vehicle powering a single home, there’s movement toward incorporating EVs into “V2G,” or vehicle-to-grid charging. V2G programs typically involve a utility, with an owner’s consent, using some of a car’s battery power to stabilize the grid during extreme heat events, making the grid more flexible. Roughly 100 V2G pilot programs were launched or being researched in late 2022 when California became interested in wide-scale implementation.
Ford’s FordPass app already allows F-150 Lightning owners to manage how much of their battery is made available during power outages and notifies them when a switchover is happening. Such an opt-in, limited option would likely be part of Ford and Resideo’s partnership. Still, there are many questions inherent to any kind of automated grid power, including those around battery degradation, privacy, and, of course, a new wrinkle on range anxiety.
