As electric vehicle startup Fisker Inc. enters its fourth month of Chapter 11 bankruptcy proceedings, existing owners have received bad news: They will have to pay labor costs to resolve two of the five outstanding recalls for their Ocean SUVs.
Fisker broke the bad news in a FAQ posted on its website Sunday night, saying that three of the five recalls — sudden power loss, false warning lights and reduced regenerative braking — can be fixed with a free over-the-air software update.
Problems emerged in two other recalls: some Oceans had faulty door handles; and all SUVs needed replacement of electric water pumps, which had caused some vehicles to lose power. Fisker said it would cover the cost of parts but that owners would have to pay for inspection and repairs at an authorized service shop. (The company said it would send a list of those shops to owners by “the end of September 2024.”)
This all comes after Fisker recently reached a settlement with its largest secured lender, the unsecured creditors committee, contract manufacturer Magna, and other parties involved in the bankruptcy. After months of sometimes heated back-and-forth, the parties agreed on how to split the proceeds from the liquidation of Fisker's assets. The judge in the case set a hearing for early October at which the settlement could be approved.
The company has already signed an agreement to sell nearly its entire remaining vehicle inventory to New York-based auto leasing company American Lease for up to $46.25 million. Now, to pay off its many creditors, the company must sell off its remaining assets, mostly used manufacturing equipment at Magna's Austrian factories, valued at more than $1 billion.