Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Fisker Stock Jumped Wednesday

By Howard Smith - Feb 24, 2021 at 11:19AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A new agreement with Apple supplier Foxconn aims to advance electric-vehicle development models.

What happened

Shares of electric-vehicle start-up Fisker (FSR 5.61%) jumped as much as 20% Wednesday after the company announced plans for a new manufacturing agreement with Foxconn Technology. Shares remained up 17% as of 10:50 a.m. EST.

The memorandum of understanding (MOU) seeks to have Foxconn -- a component supplier for Apple (AAPL 2.38%) also known as Hon Hai Precision (HNHPF 0.27%) -- manufacture electric vehicles (EVs) under the Fisker brand. 

So what

Today's bounce comes after Fisker shares dropped 10% on Tuesday. Foxconn will be the second manufacturing partnership for Fisker's planned EVs; its Ocean SUV was initially built by automotive supplier Magna (MGA 2.52%). Foxconn's connections to Apple -- combined with recent rumors of Apple considering entering the EV market -- may also have investors wondering if Fisker will play a role in any future Apple EV projects. 

Rear view of orange Fisker Ocean electric SUV with surfer and boards.

Fisker electric Ocean SUV. Image source: Fisker.

Now what

Fisker expects to begin delivering its all-electric Ocean SUV in the fourth quarter of 2022. It will initially be made in Europe using Magna's EV platform. Fisker is modifying the platform "to suit our requirements for the Ocean and other vehicles," the company said in a statement. 

The new agreement with Foxconn will similarly use the partner's technology sector expertise. The companies say the partnership will help revolutionize the automotive industry by introducing information and communication technologies to "accelerate their transition to new, innovative, and efficient manufacturing processes and business models." 

Foxconn plans to have manufacturing capacity of more than 250,000 vehicles annually for the project. Investors are showing support today for the agreement and the direction of Fisker's planned growth. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Fisker, Inc. Stock Quote
Fisker, Inc.
FSR
$10.35 (5.61%) $0.55
Apple Inc. Stock Quote
Apple Inc.
AAPL
$143.86 (2.38%) $3.34
Magna International Inc. Stock Quote
Magna International Inc.
MGA
$63.11 (2.52%) $1.55
Hon Hai Precision Industry Co., Ltd. Stock Quote
Hon Hai Precision Industry Co., Ltd.
HNHPF
$7.36 (0.27%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
332%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.