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Fisker temporarily lost track of millions of dollars in customer payments while it scaled up deliveries, triggering an internal audit that began in December and took months to complete, TechCrunch has learned.
The EV startup was eventually able to trace the majority of those payments or request new payments from customers whose payment methods had expired. But the chaos, which three people familiar with the internal payments crisis described to TechCrunch, took staff and resources away from Fisker’s sales team at a time when the company was trying to save itself by restructuring its business model.
Fisker struggled to monitor these transactions, which included down payments and, in some cases, the full price of the vehicles, because of lax internal procedures for tracking them, the people said. In a few cases, she delivered vehicles without collecting any form of payment at all, they said.
“The checks were not cashed in a timely manner or were lost altogether,” one person told TechCrunch. “We would often scramble to find checks, credit card receipts, and any wire money a few months after selling the car.”
Besides the internal audit, external auditor PricewaterhouseCoopers has been asking Fisker for more documentation about its car sales as part of the process of compiling the company’s annual financial report, according to two of the people. Fisker was often unable to provide satisfactory documentation, which led to further requests from PricewaterhouseCoopers.
“The papers collected were not always collected in their entirety, or sent to the same places,” another person said.
These sources requested anonymity because they are not authorized to speak to the press about internal affairs.
This internal confusion has put the company in a position where it has been unable to accurately quantify how much revenue it has generated, according to the people, who noted that this is one reason Fisker has yet to file its 2023 annual financial report.
Tracking payments may offer little solace to the startup, which is on the verge of bankruptcy. Fisker has temporarily halted production of its only vehicle, the Ocean SUV, after having trouble meeting internal sales goals and struggling to support customers dealing with a number of quality issues. It has alerted investors that it may not be able to continue operations without an injection of new funds.
This week, the New York Stock Exchange suspended trading in Fisker shares and delisted the company, raising the possibility that it will be unable to raise money to survive. Company Prices gobbled up – by up to 39% – on its remaining stock on Wednesday morning.
Representatives for Fisker and PwC did not respond to requests for comment.
Red flags raised
Fisker has been warning investors since last year about problems with its internal accounting practices. In November the company mentioned It discovered several “material weaknesses” in its internal financial reports.
The company initially said it lacked “a sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to analyze, record and disclose accounting matters appropriately, timely and accurately.”
This statement came after Resignation of two senior accounting staff Within a month. “Specifically, there are insufficient controls in place to ensure that the accounting department is continually provided with full and adequate support, documentation, and information, and that matters are resolved in a timely and efficient manner,” the company wrote at the time.
In the same filing, Fisker disclosed a second material weakness that involved “the risk of material misstatements in the inventory-related accounting and related income statement accounts.”
On February 29, Fisker I confess It said in a press release that it had identified an additional material weakness “in revenue and related balance sheet accounts.”
This legal jargon was a way for Fisker to acknowledge what sources told TechCrunch: It simply doesn’t have the people or processes to properly put its books together.
It created Fisker’s poor internal procedures problems Beyond tracking payments.
The company also struggled to keep up with required payments to various state DMVs when onboarding new customers, according to the people.
This has led to at least dozens of customers spending months with temporary license plates. Some owners had to upset the company for this Multiple groups Temporary license plates, with their expiration date still valid. The same is true for some owners who were Stuck waiting To obtain their title and register.
Fisker hired contractors in February to help resolve title and registration issues, but the backlog was massive, the people said. The team was working to amend paperwork related to the orders extending to August 2023, one of the people said.
“There was no infrastructure in place before the wheels of the vending machine were put into motion,” one person said.
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