What happened

Shares of electric vehicle (EV) start-up Fisker (FSRN -14.37%) fell 23.8% in April, according to data provided by S&P Global Market Intelligence. It was the EV stock's second straight difficult month. Coupled with March's decline, the stock is now off more than 50% since the last day in February, giving back all of its gains from the beginning of the year.

FSR Chart

FSR data by YCharts.

So what

Fisker is one of a large number of companies trying to capitalize on the EV revolution sweeping through the automotive industry. It stands out because it is purely a design, engineering, and marketing firm, leaving the actual vehicle manufacturing to partners including Magna International (MGA 1.02%).

Rendering of the Fisker Ocean on the road.

A rendering of the Fisker Ocean. Image source: Fisker.

The stock was flying high early in the year after the company announced more than 13,000 reservations for its Ocean vehicle, and with talk of subsidies for green vehicles to be included in President Joe Biden's infrastructure bill. But the bears have been in control more recently, with the stock pressured by concerns that Fisker is still a relatively small player in a market that is increasingly being targeted by traditional automakers and deeper-pocketed newcomers like Tesla.

In mid-April, Goldman Sachs downgraded the shares to a sell rating from neutral with a price target of $10. Analyst Mark Delaney wrote that Fisker risks being late to market, with its Ocean vehicle not scheduled to debut until the second half of 2022.

Now what

Wall Street is hardly unanimous in its criticism. Not long after the Goldman downgrade, Morgan Stanley's Adam Jonas called Fisker his "top ranked EV start-up" and set a target price at $31, more than double the current price. Jonas believes partners including Magna hope to use Fisker to show the world what they are capable of, meaning they will be reliable partners in bringing the vehicle to market.

I really like Fisker's model, and have high hopes for the company. But it is hard to dismiss Delaney's concerns. Fisker's unique manufacturing model will do little to save it from competitive pressures, and the Ocean debut is a long way off.

Worth noting is that Fisker is valued by the market at more than $3 billion despite little more than promise. Given the risks and the long timetable, it is understandable that buyers have not been rushing in as Fisker shares have fallen in recent weeks.