What happened
While the major U.S. indexes are hovering around gains of 3% for this week, one electric vehicle (EV) stock is blowing that away. As the start of production for Fisker's (FSRN -16.64%) first vehicle approaches, its shares are surging this week. As of midmorning Friday, Fisker shares have jumped about 14% since last Friday's close, according to data provided by S&P Global Market Intelligence.
So what
There was no major news from the company this week, but the stock had been on an extended decline. Even with this week's double-digit gain, the Fisker shares have plunged more than 25% over the last three months.
That brought the EV start-up's market cap to its lowest level as a public company, below $2 billion. That seems to have marked a bottom for some investors because the company has several growth catalysts on the horizon.
Now what
Fisker's Ocean SUV is set to begin commercial production next month. The vehicle will be manufactured initially in Europe by Fisker's production partner, Magna Steyr, a division of Magna International. Nearly 100 prototypes that have already been produced are being used for testing, marketing, service, and manufacturing training. Commercial production is scheduled to begin on Nov. 17.
Fisker has also partnered with Foxconn for its second model to be made at Foxconn's factory in Ohio. The sub-$30,000 PEAR is scheduled to begin production there in 2024. That vehicle should be eligible for tax credits under the Inflation Reduction Act (IRA) since it will be made in North America.
The Fisker Ocean SUV. Image source: Fisker.
While the Ocean would also be eligible based on its pricing at $37,500, those customers won't be able to receive the $7,500 tax credit under the new law because it's being produced in Europe. Fisker worked with customers prior to the passage of the law to convert deposits to nonrefundable orders, so some reservation holders will still get the credit under rules prior to the signing of the IRA into law.
Fisker said it had more than 56,000 Ocean reservations as of Aug. 1. Investors will hear a new update when the company reports on its third quarter on Nov. 2.
