Shares of electric-vehicle start-up Fisker (NYSE:FSR) 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 (NASDAQ:AAPL) also known as Hon Hai Precision (OTC:HNHPF) -- manufacture electric vehicles (EVs) under the Fisker brand.
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 (NYSE:MGA). 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.
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.