Fisker (FSRN) released a business update today, lowering the vehicle production guidance it had just provided less than three weeks ago. Yet the stock is soaring. As of 1:35 p.m. ET, shares of the electric vehicle (EV) maker were higher by 11%.

The stock is rising thanks to what the company said was the reason for the reduced production estimate. Shares are also rebounding after a 73% decline over the last three months.

Focusing on finances

That sharp decline came as Fisker struggled to ramp up production of its inaugural EV, the Ocean SUV. In its third-quarter earnings conference call for investors, the EV start-up decreased 2023 production guidance from a range of 20,000 to 23,000 units down to between 13,000 and 17,000 vehicles. Now, nearly just three weeks later, the company says it plans to produce "just over" 10,000 vehicles for the full year.

But that comes even as Fisker has taken action to improve its delivery process and has achieved several days of record daily delivery volume as a result. Now the company said it plans to throttle back production "to prioritize liquidity to unlock over $300 million of working capital, which creates additional business flexibility."

Investors are cheering its revived focus on prioritizing its financial position.

Not a buy signal

That seems like a prudent strategy considering the current environment that includes a slowing growth rate for EV demand globally. Additionally, Fisker is hoping to add revenue beyond vehicle sales through agreements to sell emission credits to other automakers.

But the bigger picture is that the stock has crashed over the past several months because it is having difficulty growing the business in its first year of production. Whether the cause of that is the manufacturing and delivery process or a more general drop in EV demand doesn't really change the severity of the situation.

Today's announcement shows the company is focusing on its finances because it has to. Those who buy the stock should realize the risk level seems to have risen in recent months.