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Fisker EV Collapse: Founders' Missteps Exposed

Henrik Fisker’s ambitious electric vehicle startup once promised a future filled with groundbreaking innovations
June 3, 2024

In a dramatic tale of ambition meeting reality, Fisker Inc., the electric vehicle (EV) startup led by renowned designer Henrik Fisker, faces imminent bankruptcy. Once promising a lineup of innovative vehicles, from autonomous pods to long-range grand tourers, Fisker has fallen short, delivering only a few thousand Ocean SUVs and leaving many ambitious projects unfulfilled.

Founded on a vision of groundbreaking electric vehicles, Fisker’s journey has been marred by significant internal strife and operational missteps. Despite the company’s ambitious claims and early investor enthusiasm, the reality has been starkly different. The Ocean SUV, their flagship and only delivered model, has been plagued with mechanical and software issues, contributing to the company’s downward spiral.

Former employees attribute the company’s troubles to the lack of foundational processes and chaotic management, primarily blaming the leadership duo of Henrik Fisker and his wife, Geeta Gupta-Fisker. This internal chaos has not only disrupted production but also severely affected customer service and the company’s ability to handle post-sale issues. 

Sean O’Grady, a former regional sales manager at Fisker, described the company’s operational environment as astonishingly disorganized. This disorder permeated all levels, leading to poor customer service, inadequate warranty systems, and significant financial mismanagement. Astonishingly, at one point, Fisker reportedly lost track of $16 million in collected payments, highlighting the depth of their organizational flaws.

As the first Ocean SUVs rolled out, customers encountered a series of problems: faulty brakes, stuck doors, and malfunctioning key fobs. The lack of a robust spare parts inventory exacerbated these issues, often leaving customers waiting weeks or even months for repairs. Legal troubles followed, with numerous lemon law lawsuits and other legal disputes concerning unpaid bills and employee complaints.

The company’s internal culture, driven by impulsive decisions and constant chaos, hindered effective vehicle production and service. An example of this was Henrik Fisker's late-stage decision to install unvalidated wheel spacers to make the cars look “cool,” which further destabilized the engineering team. This decision, along with others, reflected a pattern of prioritizing aesthetics over functionality and safety.

Geeta Gupta-Fisker's management decisions, particularly her reluctance to invest in a customer service call center and adequate spare parts, compounded these problems. Her optimism regarding the build quality at their manufacturing partner, Magna, and reliance on digital customer service solutions, proved detrimental once issues with the Ocean SUVs surfaced. The eventual outsourcing to Prelude Systems for customer service was short-lived due to unpaid bills, leading to further service disruptions.

Internally, Fisker struggled with processing warranty claims and managing service parts. The lack of a proper warranty process and spare parts stockpile forced desperate measures, such as cannibalizing parts from other vehicles, including those used by Henrik Fisker and former Chief Accounting Officer John Finnucan.

As the company’s financial situation worsened, employees faced exhausting demands to salvage operations, often working 18-hour days under intense pressure. In the final months, the company’s rapid exit from its Manhattan Beach headquarters and attempts to liquidate remaining inventory underscored the deepening crisis.

Despite efforts to incentivize sales with bonuses and waived fees, Fisker’s future remains bleak. The startup’s reliance on consignment sales with dealership partners means it recoups money only after vehicles are sold, further straining cash flow.

Fisker’s downfall illustrates the perils of overambitious goals without robust execution strategies. The company’s focus on maintaining a cool image, coupled with severe operational deficiencies, ultimately led to its precarious position. As it stands, Fisker’s vision for the future of electric vehicles remains an unfulfilled promise, overshadowed by the stark reality of its turbulent journey.

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