Fisker’s Loss of Customer Payments for Months Raises Concerns
Fisker, the electric vehicle (EV) startup, faced a major internal payment crisis as it struggled to keep track of millions of dollars in customer payments. The company’s internal audit, which began in December, took months to complete and diverted resources away from Fisker’s sales team. The chaos arose due to lax internal procedures for tracking payments, resulting in checks being lost or not cashed in a timely manner. In some cases, vehicles were delivered without any payment at all.
The disarray in Fisker’s payment system also caught the attention of external auditor PwC, who requested more documentation about the company’s vehicle sales. Fisker was often unable to provide satisfactory documentation, leading to further requests from PwC. As a result, Fisker has been unable to file its annual financial report for 2023 and is unable to accurately determine its revenue.
This internal confusion couldn’t have come at a worse time for Fisker, as the company is already on the brink of bankruptcy. Faced with challenges in meeting internal sales goals and addressing quality issues with its only vehicle, the Ocean SUV, Fisker has paused production and alerted investors that it may not be able to continue operations without additional funding. The situation worsened when the New York Stock Exchange suspended trading of Fisker shares and delisted the company, making it even harder for them to raise money.
The warning signs about Fisker’s internal accounting practices have been present since last year when the company reported multiple “material weaknesses” in its financial reporting. The company acknowledged a lack of accounting professionals and insufficient controls to ensure timely and accurate accounting matters. Additional material weaknesses were found in inventory accounting and revenue. Simply put, Fisker did not have the necessary people or processes in place to properly manage its books.
The poor internal procedures at Fisker have not only affected payment tracking but have also caused problems with making required payments to state DMVs when setting up new customers. This has resulted in delays and customers having to deal with temporary license plates that keep expiring. The backlog in resolving title and registration issues has been significant, with paperwork stretching back to August 2023.
Overall, Fisker’s internal payment crisis and accounting problems have raised major concerns about the company’s financial stability. The inability to accurately track revenue and meet financial reporting requirements has put Fisker in a precarious position. With production paused, delisting from the stock exchange, and the need for substantial funding, the future of Fisker remains uncertain.
(Note: The text provided has been rearranged and edited to create a magazine-style article. The original source was Autoblog.)