When Fisker Inc. filed for Chapter 11 bankruptcy on June 17, 2024, it did more than imperil a startup. It sharpened a question the auto industry has been slow to answer: what happens to a vehicle that depends on software updates and cloud services from a company that may not survive? The case highlights how digital dependency in modern cars can create risks that extend beyond the showroom floor, including potential impacts on safety reporting expectations and the day-to-day experience of ownership.
Fisker’s Collapse and the Debtor-in-Possession Limbo
Fisker Inc. initiated its Chapter 11 filing on June 17, 2024, in the U.S. Bankruptcy Court for the District of Delaware. The joint administration case, captioned In re: Fisker Inc., et al., Case No. 24-11390 (TMH), allowed the company to continue operating as a debtor-in-possession, meaning it retained control of its assets while attempting to restructure. That status kept the lights on temporarily, but it did nothing to guarantee the long-term survival of the software systems embedded in every Fisker Ocean SUV already on the road, from over-the-air (OTA) update servers to mobile apps and back-end authentication services.
The Delaware court docket confirms the main case under number 24-11390-TMH for Fisker Inc. and a related proceeding for Fisker Group Inc. under 24-11377-TMH. For owners, the distinction between corporate entities matters less than the practical outcome: a company in bankruptcy may have little incentive or capacity to push OTA patches, maintain cloud-connected features, or respond to newly discovered bugs. Debtor-in-possession status is a holding pattern, not a rescue plan. If restructuring fails and the company liquidates, the software intellectual property could be sold, shelved, or simply abandoned, leaving vehicles frozen at whatever software version they last received and exposing drivers to a future of gradually degrading digital performance.
When Safety Reporting Depends on a Company That May Not Exist
Modern vehicles equipped with advanced driver-assistance systems generate a stream of telemetry data that federal regulators count on for safety oversight. The National Highway Traffic Safety Administration operates a crash-reporting program that requires manufacturers of vehicles with automated driving systems and Level 2 ADAS to submit incident data. This framework assumes a stable, responsive manufacturer on the other end of the reporting pipeline. When that manufacturer enters bankruptcy or ceases operations, the assumption breaks down and regulators can lose visibility into the real-world behavior of complex driver-assistance features.
The governing instrument, identified as Standing General Order 2021-01, places the reporting obligation squarely on the company that built or deployed the system. If that company dissolves, it may be unclear who, if anyone, continues the reporting in practice unless a buyer explicitly assumes responsibility as part of an asset sale or ongoing operations. This creates a potential blind spot: vehicles with active ADAS features remain on public roads, but the data regulators use to identify emerging crash patterns could become incomplete or delayed if the manufacturer’s reporting pipeline degrades. The regulatory structure, in other words, was designed for an industry of established automakers with decades-long operational horizons, not for venture-backed startups that can vanish in a few quarters, leaving orphaned fleets whose safety performance may be harder for regulators to monitor through the same reporting channels.
The Ownership Experience After the Software Dies
Most coverage of EV bankruptcies focuses on investors and creditors. Far less attention goes to the people still driving the cars. A Fisker Ocean owner who bought the vehicle expecting regular software improvements, bug fixes, and feature additions now faces a product that may never receive another update. This is not a minor inconvenience. In software-defined vehicles, updates can address everything from touchscreen responsiveness and climate control calibration to brake behavior and charging compatibility. Without them, small glitches can compound into serious usability problems, and previously known software issues may remain uncorrected even when fixes are technically feasible.
The analogy to smartphones is instructive but incomplete. When a phone maker goes under, the device becomes less useful over time as apps drop support and security patches stop. But a phone does not carry passengers at highway speeds. A car with degraded software can develop safety-relevant issues that no third-party mechanic can easily fix, because the diagnostic tools and firmware are often locked behind proprietary systems controlled by the manufacturer. Owners may eventually turn to independent hackers and open-source communities for workarounds, but that path can raise legal and safety questions and offers no guarantee of reliability. The result is a class of vehicles that look functional but are slowly losing the digital infrastructure they were designed to rely on, from map updates and connectivity to the algorithms that govern traction control and energy management.
A Structural Flaw in How Cars Are Regulated
The Fisker case exposes a gap that extends beyond one company. The federal regulatory framework for vehicle safety was built around hardware. Recalls address defective parts. Crash standards test physical structures. But software now controls core vehicle functions, and no federal rule requires an automaker to maintain software support for a defined period after sale. There is no automotive equivalent of the warranty-of-habitability concept in housing law, nothing that compels a manufacturer or its successors to keep a vehicle’s digital systems operational for a minimum number of years, even when those systems are integral to how the vehicle meets safety expectations.
This gap is especially dangerous as more automakers adopt subscription-based features and cloud-dependent services. If a company offering heated-seat subscriptions or remote-start features through a server goes bankrupt, those paid features could simply disappear, with little recourse for customers who treated them as part of the vehicle’s value. The Standing General Order crash-reporting program, while valuable, addresses only the data-collection side of the problem. It does not require manufacturers to maintain the software that generates that data in the first place or to ensure continuity of critical functions when corporate ownership changes. Regulators have built a system that depends on corporate cooperation without building a backstop for corporate failure, leaving a regulatory blind spot where digital infrastructure and consumer protection intersect.
What Fisker’s Failure Signals for the Broader EV Market
The common assumption in the EV industry is that competition will sort winners from losers, and that consumers will naturally gravitate toward well-capitalized brands. Fisker’s bankruptcy challenges that assumption by showing how quickly a funded, publicly traded company can move from production to dissolution. The vehicles it produced will remain on roads for years, possibly decades, creating a rolling experiment in what happens when software-dependent machines outlast their makers. Each remaining Ocean becomes a case study in how long critical cloud services stay online, how quickly bugs accumulate, and how owners adapt when the official support channels go silent.
The most useful lesson from Fisker’s collapse is not about one company’s mismanagement. It is about the structural mismatch between a fast-churning startup ecosystem and a product that is supposed to last for a decade or more. Policymakers, regulators, and established automakers now have a concrete example of what happens when that mismatch is ignored. If they treat Fisker as an anomaly, similar failures will repeat as other niche EV and software-first vehicle companies encounter financial stress. If, instead, they respond by hardening rules around software support, clarifying successor obligations in bankruptcy, and ensuring that safety reporting does not evaporate when a balance sheet implodes, the episode could mark a turning point. Fisker’s fall would then be remembered less as another failed EV startup and more as the moment the industry accepted that in a software-defined car, the code must be regulated as carefully as the steel.
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*This article was researched with the help of AI, with human editors creating the final content.
