Fisker Must Cover All Ocean Recall Repairs, DOJ Declares
Published: October 9th, 2024.
The U.S. Department of Justice (DOJ) has ruled that Fisker, an electric vehicle startup undergoing bankruptcy proceedings, cannot charge customers for recall-related repairs on their Ocean SUVs. This decision followed a filing with the NHTSA on October 7, which deemed Fisker’s plan to shift these costs to owners illegal.
Fisker had initially announced that Ocean owners would need to pay for repairs linked to two specific recalls: vehicle door handle issues and a faulty water pump that could lead to power loss. However, this approach violated the National Traffic and Motor Vehicle Safety Act, which mandates manufacturers to cover all costs associated with safety-related defects.
The DOJ filing stated that Fisker’s proposed plan to reimburse owners later also violated the Act. The agency noted that regardless of bankruptcy status, manufacturers are legally required to offer free repairs for recalls. According to the DOJ, Fisker’s plan to cap funds for these repairs at $750,000 fell short of what was needed, with repair costs likely exceeding that amount.
The Ocean SUV, Fisker’s flagship model, has been recalled several times due to various issues. In addition to the faulty Motor Control Unit (MCU), other concerns have included malfunctioning warning lights, sticking door handles, and losing regenerative braking power. The problems affect both the 2023 and 2024 model years.
As Fisker navigates bankruptcy, the DOJ’s objection adds to their troubles. The U.S. SEC is also investigating Fisker, raising questions about their liquidation plan and whether they properly preserved corporate records. According to the SEC, Fisker may have failed to ensure the safekeeping of important documents as they proceeded to bankruptcy.
Compounding Fisker’s woes, the landlord of their former La Palma, California, headquarters has filed claims alleging the company left the property in disarray. Photos show the space littered with trash and hazardous waste, including large drums and full-scale clay models of Fisker’s upcoming vehicle projects.
The landlord asserts that Fisker hired Heritage Global Partners, an auction house, to clear out the facility by late September. However, Fisker allegedly left the space in complete disarray, with items scattered and handled without clear order. Heritage Global Partners, for their part, claimed they could not access the facility as planned and denied responsibility for the hazardous materials left behind.
While Fisker is unlikely to produce additional Ocean SUVs, their challenges continue as they try to navigate the regulatory landscape and close out their remaining obligations to customers. Currently, Fisker has not responded to requests for comment regarding these developments.
The DOJ has clarified that Fisker must shoulder all costs of rectifying vehicle defects and that its bankruptcy status does not exempt it from these responsibilities. This ruling reinforces existing safety regulations, ensuring customers are not burdened with repair costs resulting from manufacturer defects.