Please ensure Javascript is enabled for purposes of website accessibility

Why Fisker Stock Is Down Today

By Lou Whiteman - May 10, 2021 at 2:10PM

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

The EV company is lacking a spark to get investors excited.

What happened

Shares of Fisker (FSR 3.90%) traded down about 10% on Monday, a bad day for a lot of electric vehicle (EV) stocks. Investors are getting nervous about EV start-ups, and Fisker's delayed timetable to launch its vehicle is not doing much to help.

So what

Electric vehicle stocks were all the rage in 2020, but that enthusiasm has been tempered of late by worries about the onslaught of competition coming from both traditional automakers and start-ups, as well as the complexity of bringing a mass-market vehicle to market.

The sector was under pressure on Monday after Workhorse Group reported a first-quarter loss of $120.5 million on revenue of just $521,000. Analysts were expecting a big loss, but the revenue number was less than one-quarter of what was expected.

The Fisker Ocean prototype

Image source: Fisker.

The company blamed "bottlenecks within the global supply chain," among other items, for its difficulties. Those are issues that are not confined to just one company.

Fisker won't release its first-quarter results until May 17. But the stock could be taking a hit on Monday due to the company's Friday night disclosure that it "remains on target" to start production of its Ocean vehicle in the fourth quarter of 2022, with plans to unveil the production version this November.

Some have worried that timeline will mean the Ocean is late to the market, and there has been speculation that Fisker might deliver the Ocean sooner.

Now what

On paper, there is a lot to like about Fisker. The company stands out from the competition in that it is focused purely on design, engineering, and marketing, with plans to leave actual vehicle manufacturing to partners including Magna International. That should remove some of the lower-margin parts of the auto business, and allow Fisker to avoid the inevitable stumbles that come with scaling up manufacturing.

The problem is, we are still more than a year away from seeing that potential realized. Investors right now don't have that sort of patience, and the stock has traded off as a result.

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool recommends Magna Int'l. The Motley Fool has a disclosure policy.

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
$9.59 (3.90%) $0.36

*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 analyst team.

Stock Advisor Returns
389%
 
S&P 500 Returns
125%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

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.