Due to a lack of demand for electric cars, the startup business Fisker, which makes electric cars, said this week that it is stopping manufacturing of its cars in order to gather $150 million in emergency finances.
With the stated goal of “creating the world’s most emotional and sustainable electric vehicles,” the California-based company has hardly built more than a thousand electric vehicles globally this year.
“The company has approximately 4,700 vehicles in its currently inventory, carried over from 2023 and including 2024 production,” the company said. “While it has not completed an NRV analysis for 2024, Fisker believes the completed vehicle value for its inventory as of March 15, 2024, is in excess of $200 million.”
“Fisker will pause production for six weeks starting the week of March 18, 2024, to align inventory levels and progress strategic and financing initiatives,” it added.
According to Reuters last month, the car company’s financial health was causing “substantial doubt about its ability to continue” based on indications it was sending out.
The corporation engaged outside assistance to deal with a potential bankruptcy case, according to a Wall Street Journal report from last week.
The company’s difficulties coincide with the announcement on Wednesday by the Biden administration that it will keep up its campaign to demolish the gas-powered vehicle sector by imposing on automakers the strictest environmental regulations in recorded history.
The regulation will compel automakers “to ramp up sales of electric vehicles while slashing carbon emissions from gasoline-powered models,” according to The Washington Post, which dubbed the initiative “controversial.”
The Environmental Protection Agency (EPA) asserted that the United States would profit $100 billion annually from the prevention of more than 7 billion tons of carbon emissions through its national pollution standard, an assertion that may prove fatal in court.
The political right swiftly reacted to the announcement on social media, claiming that Biden’s program will harm the US auto sector.
“Biden’s latest ban on gas-powered vehicles and replacement with electric vehicles is another direct assault on consumer choice and the American way of life,” said Sen. Ted Cruz (R-TX). “It ignores the needs of American families in order to appease the radical environmental lobby at the expense of millions of jobs supported by the automotive industry. It’s time to put an end to this regulatory overreach.”