Photo: Fisker
Until Fisker descended into chaos, nobody considered a car company's financial stability when they ordered one of their vehicles. However, once the cat gets out of the bag, nobody can ignore the frightening prospect of losing all service and support for their vehicle. Now, Rivian owners and even those considering a Tesla are scared that these companies might be in a similar situation.
People are not used to thinking a car company might go bust, leaving them with vehicles that are hard to service. Sure, some brands have been retired from the market, but the companies behind them are still standing, fulfilling their part of the contract to provide spare parts and support for the vehicles they sold.
However, as more car startups entered the market, the situation changed. Fisker is the first EV startup whose demise will leave thousands of owners holding the bag. Those who trusted Fisker to become a thriving carmaker now see their cars losing almost all value. Fisker Ocean, the only model the EV startup delivered, is riddled with problems, and soon, there'll be no one to fix them.
There are reports that roadside assistance for Fisker owners will not be honored, and service centers will soon disappear. This will quickly turn these vehicles into junkyard material because spare parts are already hard to come by. However, the biggest concern is the software and all server-side features, which will stop functioning once Fisker pulls the plug.
This perspective has already freaked out Rivian owners, who are looking anxiously at the company's financial situation. Rivian reported a $1.45 billion loss in the first quarter, pretty much flat with previous losses. Unlike Tesla, which became profitable much earlier in its history, Rivian continues to lose money while trying to launch new models and improve manufacturing efficiency.
If you look on social media, you'll encounter many people wondering what would happen if Rivian goes bankrupt. Some of those questions come from those who considered buying one of their vehicles but now think twice after seeing Fisker's problems. Rivian EVs have been unanimously praised, but this will not count if the company exhausts all its reserves before becoming profitable.
The funny thing is that not even Tesla is spared from similar thoughts. People worry that the EV maker's situation is no better, especially considering the recent layoffs. This points to a really difficult situation, reminding people of Model 3 ramp-up times when Tesla was close to going bankrupt. This is a far-fetched possibility, but nobody knows what to expect when every other car company does so badly.
When a carmaker can no longer service its vehicles, the first thing to worry about is that the value of your car will plummet. You might not be able to sell it because nobody wants it. This is especially true if the software will not work anymore. Imagine there will be no route calculations when you set the destination into the navigation system, and you will have to figure out where you need to charge on the road. And that's just the beginning.
Even if you can somehow use the car with its most basic functions, you will soon find it hard to service it because there will be no parts. With most startups producing their own components, you can't rely on suppliers to find compatible parts. However, Tesla owners might still be safe. Considering the high number of vehicles on the road, third parties will likely take over parts production and even software development, replacing Tesla. It's an important market, and it will not disappear overnight. I'm not sure if I can say the same about Rivian or Lucid.
Of course, there are things you can do to ensure you are not affected if the maker of your vehicle goes out of business. The best option is to lease a vehicle instead of buying it. This doesn't make much sense for Tesla because it's still a solid company. Tesla doesn't allow buyouts at the end of the lease period, which is an important disadvantage. However, Rivian has very compelling leasing offers. If it goes out of business, you can simply stop paying your monthly payments and return the vehicle, and it will not be your problem anymore.
However, as more car startups entered the market, the situation changed. Fisker is the first EV startup whose demise will leave thousands of owners holding the bag. Those who trusted Fisker to become a thriving carmaker now see their cars losing almost all value. Fisker Ocean, the only model the EV startup delivered, is riddled with problems, and soon, there'll be no one to fix them.
There are reports that roadside assistance for Fisker owners will not be honored, and service centers will soon disappear. This will quickly turn these vehicles into junkyard material because spare parts are already hard to come by. However, the biggest concern is the software and all server-side features, which will stop functioning once Fisker pulls the plug.
This perspective has already freaked out Rivian owners, who are looking anxiously at the company's financial situation. Rivian reported a $1.45 billion loss in the first quarter, pretty much flat with previous losses. Unlike Tesla, which became profitable much earlier in its history, Rivian continues to lose money while trying to launch new models and improve manufacturing efficiency.
If you look on social media, you'll encounter many people wondering what would happen if Rivian goes bankrupt. Some of those questions come from those who considered buying one of their vehicles but now think twice after seeing Fisker's problems. Rivian EVs have been unanimously praised, but this will not count if the company exhausts all its reserves before becoming profitable.
The funny thing is that not even Tesla is spared from similar thoughts. People worry that the EV maker's situation is no better, especially considering the recent layoffs. This points to a really difficult situation, reminding people of Model 3 ramp-up times when Tesla was close to going bankrupt. This is a far-fetched possibility, but nobody knows what to expect when every other car company does so badly.
When a carmaker can no longer service its vehicles, the first thing to worry about is that the value of your car will plummet. You might not be able to sell it because nobody wants it. This is especially true if the software will not work anymore. Imagine there will be no route calculations when you set the destination into the navigation system, and you will have to figure out where you need to charge on the road. And that's just the beginning.
Even if you can somehow use the car with its most basic functions, you will soon find it hard to service it because there will be no parts. With most startups producing their own components, you can't rely on suppliers to find compatible parts. However, Tesla owners might still be safe. Considering the high number of vehicles on the road, third parties will likely take over parts production and even software development, replacing Tesla. It's an important market, and it will not disappear overnight. I'm not sure if I can say the same about Rivian or Lucid.
Of course, there are things you can do to ensure you are not affected if the maker of your vehicle goes out of business. The best option is to lease a vehicle instead of buying it. This doesn't make much sense for Tesla because it's still a solid company. Tesla doesn't allow buyouts at the end of the lease period, which is an important disadvantage. However, Rivian has very compelling leasing offers. If it goes out of business, you can simply stop paying your monthly payments and return the vehicle, and it will not be your problem anymore.
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