June 18 (UPI) -- Electric vehicle manufacturer Fisker filed for Chapter 11 bankruptcy Monday after recalling 6,864 of its 2023 Ocean SUVs days earlier.
La Palma, Calif.-based Fisker stopped its vehicle production and plans to sell its assets.
Fisker was founded in 2016 and formerly worth $2.9 billion, but sales of its only model, the Ocean SUV, have been too slow to support its production costs.
"Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently," Fisker officials said in a prepared statement Monday.
"After evaluating all options for our business, we determined that proceeding with a sale of our assets under Chapter 11 is the most viable path forward for the company," Fisker officials said.
Company officials anticipate continuing to do business after downsizing and reorganizing under bankruptcy protection.
The automaker's days-old recall of the Ocean SUV is due to a potentially sudden loss of drive power by going into a "safe state protection mode."
Fisker says an over-the-air software upgrade can fix the problem without owners taking their vehicles in for servicing.
Fisker reported the recall to the National Highway Traffic Safety Administration on June 5, along with a recall for incorrectly displayed warning lights.
