Fisker Automotive finds itself in a precarious position as recent reports indicate an exodus of customers canceling reservations for the highly anticipated Ocean electric crossover. The company, already grappling with financial woes, now faces the daunting task of reimbursing over 40,000 reservations, a considerable portion of its total collected since opening orders in November 2019.
According to leaked data and internal metrics cited by Business Insider, Fisker is witnessing an average of 70 to 80 cancellations per day, culminating in the staggering figure of 40,000 cancellations. This development compounds the company’s existing challenges on multiple fronts. Not only does it signal a drastic downward revision in sales forecasts, potentially slashing revenue projections by more than 50%, but it also exacerbates Fisker’s pressing need to bolster sales amid a backdrop of halted Ocean production and a surplus of unsold inventory.
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The financial ramifications are significant, with Fisker obligated to refund deposits to every canceled reservation holder as per its terms and conditions. While the company retains a processing fee of $25 for each reservation, the estimated $9 million refund liability further strains its already fragile financial position. Additionally, the recent price cuts on remaining 2023 models in March 2024 may have prompted some customers to reconsider their reservations, while others may have lost confidence in the company’s stability amidst looming bankruptcy concerns.
Beyond the Ocean, Fisker’s lineup includes promising models like the Alaska pickup, PEAR city car, and Ronin four-door convertible, each with their own reservation schemes. However, the fate of these reservations remains uncertain, casting further shadows over the company’s future prospects. Refunding these reservations, particularly for the PEAR, which had garnered approximately 5,600 reservations by February 2023, poses additional challenges and deepens the company’s financial woes.
As Fisker struggles to navigate through this turbulent period, the uncertainty surrounding its future looms large. With dwindling reservations, halted production, and mounting financial obligations, the road ahead appears increasingly challenging for the electric car manufacturer.
