Electric Vehicle Sales Slow Down as Manufacturers Struggle to Reach Mainstream Audience
Electric vehicle sales have hit a roadblock as manufacturers struggle to push electric vehicles into the mainstream market. The latest setback comes from electric vehicle maker Fisker, who filed for Chapter 11 bankruptcy protection, becoming the second electric startup to do so in the last year.
Fisker Group Inc. cited various market and macroeconomic challenges as the reason for their bankruptcy filing. The company estimated its assets to be between $500 million and $1 billion, with liabilities between $100 million and $500 million. This move highlights the difficulties faced by electric vehicle companies in attracting buyers beyond early adopters of the technology.
Founded by designer Henrik Fisker, the company is known for its luxury plug-in hybrid Karma and the 2022 Ocean all-electric SUV. However, this is not Henrik Fisker’s first failed automotive venture, as his previous electric car company also collapsed in 2013.
The slowdown in electric vehicle sales is attributed to a lack of infrastructure and rising inflation, making car loans more expensive for consumers. According to J.D. Power, electric vehicle sales only grew by 3.3% in the first quarter of this year, far below the 47% growth seen last year. This has led to price cuts and job cuts at leading companies like Tesla.
The Biden administration’s push to increase electric vehicle sales as part of efforts to combat climate change is facing opposition from Republicans, who criticize the plan as government overreach. Auto companies are investing billions in factories and battery technology to meet the Environmental Protection Agency’s requirement that 56% of all new vehicle sales be electric by 2032.
Fisker Inc. is currently in talks with financial stakeholders about debtor-in-possession financing and selling its assets. The bankruptcy filing underscores the challenges faced by electric vehicle manufacturers as they strive to make electric vehicles a mainstream choice for consumers.