Electric vehicle (EV) maker Fisker (FSRN -12.70%) has been no stranger to bad news in recent months as the company has dialed down its full-year production target, faces liquidity concerns, and was late filing its 10-Q. Additionally, its chief accounting officer resigned after just a week on the job.
This week, the EV stock was declining in response to news reports casting doubt on both its product and its financial prospects.
That and concerns that the stock market had gotten overheated seemed to weigh on the stock this week as shares were down 8% for the week as of Thursday at 2:49 p.m. ET, according to data from S&P Global Market Intelligence.
Image source: Fisker.
Fisker is still stuck in reverse
Fisker's shares slipped 2.5% on Tuesday after a report in The Information came out, saying that some customers were disappointed in their new vehicles. Among the complaints about the new cars were mechanical flaws that make them dangerous or missing features that the company had promised to provide. Others have tried to cancel their pre-order payment of $5,000.
In a separate announcement, the company said it had expanded its service capabilities in North America and has filled several key positions, including hiring a technical services director who will start next month.
On Wednesday, the stock tumbled along with a broader sell-off in the market as investors let some air out of the recent rally. Additionally, a report in The Wall Street Journal detailed a cash crunch facing a number of EV makers, including Fisker. According to the report, Fisker finished the third quarter with 187 days of cash left, meaning it could run out of cash as soon as Q2, though management says its cost structure will improve after it gets through an initial push to deliver its new vehicles.
What's next for Fisker
The customer complaints seem a bit surprising as the new Fisker Ocean has won a number of awards. In fact, just last week, it was named the best full electric vehicle at a French competition called Automobile Awards 2023.
Still, mass production presents a more difficult challenge, and individual vehicles may have had problems, which could be a more likely possibility since the company has outsourced its manufacturing.
The company's financials are another big question, but if Fisker can continue to ramp up production, it will buy itself some time and is likely to receive more financing if needed.
Expect the volatility to continue for the stock in 2024. A turnaround is possible, but the company has a lot to prove.
