Fisker wants owners to pay for recall, Justice Department says impossible

Bankrupt electric car maker Fisker has launched a controversial proposal that would require owners to shoulder the labor costs of multiple recall-related repairs. However, the U.S. Department of Justice, on behalf of the National Highway Traffic Safety Administration (NHTSA), said the move was illegal under federal law.

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In mid-September, Fisker revealed that shipowners would need to pay labor costs related to Ocean’s two ongoing recalls. The first was related to a faulty door handle, and the second was related to a faulty water pump, which could cause a power outage. The electric car startup briefly reversed that decision, but then did a U-turn and confirmed that owners would indeed have to pay.

According to the National Highway Traffic Safety Administration, this is prohibited by the National Traffic and Motor Vehicle Safety Act, which all automakers are required to comply with.

READ: Fisker Flip-Flops Again Asking Owners to Pay for Recall Repairs, But Feds Don’t Agree

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Under the bill, manufacturers must correct all vehicle defects or areas of noncompliance without charging customers. Fisker’s liquidation plan hopes to establish a fund to pay for parts related to recalls, but only if the cost of parts for such recalls does not exceed $750,000.

It also specifically states that owners must pay for labor and that it can only be reimbursed later through the Fisker Owners Association, which can obtain funding in future lawsuits against Fisker parts suppliers. However, there is no guarantee that these funds will be recovered and the owners will be compensated.

The U.S. Department of Justice filed an objection to the plan in U.S. Bankruptcy Court in Delaware, stating that “the SAFE Act clearly states that all costs associated with repairing defective and nonconforming vehicles must be borne by the manufacturer; the Act’s requirements for parts and labor There is no difference.” NHTSA added that it “may have preemptive claims against Fisker’s estate” if Fisker fails to comply with the safety act.

“The United States requests that the revised DS and Plan be modified to comply with the SECURE Act or be denied; (2) that the plan’s confirmation order contains language that safeguards U.S. federal interests; (3) that any further steps the Court deems necessary and just relief,” the court document added.

So far, Fisker has not responded to the Justice Department’s objections to its recall plans.

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