Published on 21 Mar 2024 on Zacks via Yahoo Finance
EV Startups' Survival Saga Continues: Fisker (FSR) on the Edge
The electric vehicle (EV) frenzy, witnessed in 2020 and 2021, driven by special purpose acquisition companies (SPACs), has lost its spark. Skepticism among investors is rising as EV startups tread on thin financial ice, facing the make-or-break challenge of proving their mettle in a fiercely competitive market.
The industry’s capital-intensive nature is fast depleting the cash reserves of startups, with companies prompted to file for bankruptcy. The latest casualty is Fisker Inc. FSR. Per Wall Street Journal, the company has hired restructuring advisers as it eyes bankruptcy filing. And this doesn’t come as much of a surprise considering the cash-burning dilemma of most EV startups. Last year, Lordstown Motors and Proterra filed for Chapter 11 bankruptcy. So, what is it that’s making it tough for the relatively new entrants to make a mark?
EV Startups Under Immense Pressure