It’s been an extremely rough 2024 for Fisker (OTCMKTS:FSRN) stock, as the pure-play electric vehicle (EV) company has struggled with a wide variety of issues.
In its preliminary earnings, Fisker disclosed that it produced 10,193 Oceans while delivering only 4,929 of them, signaling a demand problem. Last month, the company announced that it would pause production for six weeks starting from March 18 to correct its inventory. Now, a report claims that the issue isn’t getting any better.
According to Business Insider, more than 40,000 of Fisker’s over 70,000 Ocean reservations have been canceled. The publication adds that the company’s seven-day cancellation average has tallied in at around 70 to 80 cancellations per day.
“It’s not clear how many reservation cancellations Fisker has already reimbursed in the years since November 2019, when it began accepting reservations, but the total cost to date of around 40,000 reservation reimbursements would be in the ballpark of $9 million,” wrote Business Insider.
Fisker Stock: Customers Cancel 40,000 Ocean Reservations
Fisker opened reservations for the vehicle in November 2019 and received around 65,000 reservations by February 2023. Each reservation required a $250 refundable deposit, less a $25 processing fee if the deposit was refunded.
The cancellations come despite an up to 39% discount on the Ocean, depending on the trim level. The Ocean in the Sport trim is now the company’s most affordable vehicle, with a starting price tag of $24,999.
It isn’t exactly surprising to see the mass cancellations, as Fisker is at risk of bankruptcy. These customers may fear that maintenance and support of the Ocean will cease in the event of a bankruptcy. In February, the company noted that it expects to conclude that there is substantial doubt about its ability to continue as a going concern following the submission of its 2023 Form 10-K. That annual report has yet to be submitted.
The filing’s delay is likely partially attributed to a TechCrunch report alleging the company temporarily lost track of millions of dollars of customer payments. Fisker’s auditor, PwC, had even asked for further vehicle sales documentation, which the company was unable to provide.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
