The failure of Fisker last year left some drivers in a terrible position: making payments for a luxury electric car suddenly worth a tiny fraction of what they owed on it, liable to break down at any moment, with no company left to support repairs.
The Fisker Ocean was a lovely looking electric SUV with some promising ideas like an available solar roof that (slightly) stretched its range and a screen you could rotate from portrait to horizontal. But our editors found significant problems with it long before the company went bankrupt, causing us to issue a rare “don’t buy this one” verdict.
Shortly after, the company went under, leaving owners stranded.
Naturally, a bevy of lawsuits followed.
That saga isn’t entirely over, but a new development this week could offer some of those Fisker owners a lifeline.
Trade Your Fisker for a Rivian (Sort Of)
Many automakers have their own finance arms, often backed by major banks. JP Morgan Chase was the money behind Fisker Finance. Since the bankruptcy, Fisker owners have tied the bank up in lawsuits.
This week, it started offering those owners a settlement that might make financial sense for many of them. It involves flipping your Fisker for a Rivian.
Owners have begun posting their offer letters to the Fisker forum on Reddit, where they go to share lawsuit updates and tips on how to keep a car running when the company that built it no longer exists to support it.
The letters come from law firm Hagens Berman, representing Chase. For owners who have a “bricked” Ocean that won’t start, Chase will buy the vehicle back at a fixed price. That price appears to be different in each offer letter, so the firm seems to be using some formula to determine a unique value for each Ocean.
Owners with a working Ocean have two other options:
- Sell the vehicle to Rivian for a fixed price
- Trade it into Rivian with that same fixed price as the trade-in value and “receive incentives for the purchase or lease of a Rivian vehicle.”
Offers seem to vary, but two early posters to the Reddit forum cited offers of around $36,000 and $52,000, as well as a $6,000 discount on the Rivian of their choice.
Rivian currently offers just two models, the R1T pickup and the R1S SUV. Both have earned strong reviews from the automotive press (our editors find a lot to praise in both). A smaller R2 and R3 are in development.
Perhaps more important for Fisker drivers, Rivian has, so far, survived the culling of EV startups that claimed Fisker, Lordstown Motors, and others.
Rivian’s future isn’t guaranteed. Starting up a new automaker is one of the most significant challenges in business because it requires losing immense amounts of money for many years before turning your first profit. Fisker failed, in part, because it didn’t attract enough deep-pocketed backers willing to lend it money to lose.
But Rivian has attracted some heavy-hitter investors, including a $5 billion lifeline from the Volkswagen Group (the planet’s second-largest automaker), which now plans to use some Rivian hardware and software in EVs sold under its many brands. One of those investors, incidentally, is Kelley Blue Book parent company Cox Automotive, though Cox’s $350 million investment is dwarfed by larger shares from companies like Amazon and the Vanguard Group.
Offer Could Be Worthwhile for Some
The Kelley Blue Book editorial team has no special access to Rivian. We’ve reached out to ask how they got involved in the deal and what they plan to do with a fleet of unsupported Fisker Oceans if many owners take the offer. We’ll update this story if they respond.
For Fisker owners, it’s natural to wonder whether acquiring another car from a startup automaker is a risk worth taking. But the offers in the letters appear to be much higher than what an Ocean would fetch for sale or trade-in to another automaker today. The move could help them get out of a rapidly depreciating asset that could fail at any moment and into a more slowly depreciating asset still supported by the company that built it.