Fisker suddenly lost track of millions of dollars in customer payments as it increased delivery rates. This led to an internal audit that began in December and took months to finish.
In the end, the EV startup was able to either find most of those payments or ask customers whose payment methods had ended for new ones. Three people who knew about the internal payment problem told TechCrunch that the chaos took people and resources away from Fisker’s sales team at a time when the company was trying to save itself by changing the way it does business.
People who work for Fisker say that the company had trouble keeping track of these deals, which included down payments and sometimes the full price of the cars, because they didn’t have strict rules in place to do so. They said that in some cases, it provided cars without getting any payment at all.
One of the people told TechCrunch, “Checks were either not cashed on time or were lost altogether.” “A few months after a car was sold, we often had to rush to find checks, credit card receipts, and wired funds.”
There was also an outside audit by PwC, which asked Fisker for more information about its car sales as part of putting together the company’s yearly financial report, according to two of the people. Fisker often couldn’t provide enough paperwork, which made PwC make more requests.
“The paper that was being picked up wasn’t always complete or sent to the right places,” said someone else.
It was asked that these sources remain anonymous because they were not allowed to talk to the press about private issues.
People who know the company say that this internal chaos made it impossible for the company to give a correct estimate of how much money it had made. This is one of the reasons Fisker has not yet turned in its yearly financial report for 2023.
Locating the payments might not bring much comfort to the startup, which is about to go bankrupt. Fisker has stopped making its only car, the Ocean SUV, because it wasn’t meeting its own sales goals and buyers were having trouble getting help with a number of quality issues. Investors have been warned that the company might not be able to keep running without more cash.
The New York Stock Exchange stopped selling Fisker shares and took the company off its list of companies this week. This makes it more likely that the company won’t be able to get enough money to stay alive. The company cut the prices of its leftover stock by as much as 39% Wednesday morning.
Representatives from Fisker and PwC did not answer when asked for feedback.
Raised Red Flags
Since last year, Fisker has been telling investors that there are issues with the way it does its own accounts. The company said in November that it had found several “material weaknesses” in the way it reported its finances internally.
At first, the business said it didn’t have “enough professionals with the right level of accounting knowledge, training, and experience to properly analyse, record, and disclose accounting matters in a timely and accurate manner.”
After two chief accounting officers quit within a month, that remark was made. The company said at the time, “Specifically, there are not enough controls to make sure that the accounting department always gets all the help, documentation, and information it needs, and that problems are solved quickly and correctly.”
In the same report, Fisker talked about a second major flaw: “risks of material misstatement over the accounting for inventory and related income statement accounts.”
In a news release on February 29, Fisker said that it had found another important weakness “in revenue and the related balance sheet accounts.”
Fisker was using legalese to say what sources told TechCrunch: it didn’t have the right people or methods in place to put together its books correctly.
Fisker’s bad internal processes have caused more problems than just keeping track of payments.
People say that the company has also had a hard time paying the payments that are due to different state DMVs when they sign up new customers.
Because of this, at least dozens of customers have had to use temporary licence plates for months. Some owners have had to call the company more than once to get new temporary plates because the old ones keep running out. It’s been the same for some owners who have had to wait for their title and registration.
People say that Fisker hired freelancers in February to help with the title and registration issues, but there was a huge backlog. One of the people there said that the team was changing papers for orders that went back to August 2023.
Also Read: Nyse Stops Trade in Fisker
One of the people said, “There was no infrastructure in place before the sales machine was turned on.”
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