Fisker's (FSRN -12.70%) problems don't seem to end. Shares of the electric vehicle (EV) maker crashed 10.7% within minutes of the market's opening on Tuesday and slumped below $1 after reports of an investigation of its Ocean SUV surfaced.
Fisker's Ocean SUV may have a problem
The National Highway Traffic Safety Administration's (NHTSA) Office of Defects Investigation (ODI) has initiated a "preliminary evaluation" after receiving nine complaints about braking for Fisker's Ocean SUV. The complaints allege the EVs lose partial braking performance over low traction or bumpy surfaces without alerting the driver, with one complaint even alleging a crash and an injury. The ODI is now investigating the scope and severity of the problem.
The timing of the probe couldn't have been any worse for Fisker. The EV maker is already grappling with several issues, including production hiccups, low deliveries, and a cash crunch.
Fisker is trying to fix things, but...
To be sure, Fisker is still a young company and EVs are a capital-intensive business, so problems with production and delays aren't anything new in the industry. Fisker has acknowledged its weaknesses and is trying to turn things around. Just days ago, the EV maker said it is tweaking its business model and developing a dealer-partnership model in North America while pursuing a direct sales and dealer-hybrid sales model in Europe to boost deliveries.
Although Fisker also cut its production outlook several times last year, it finally began deliveries of its first Ocean SUVs in the U.S. in June 2023, nearly three years after it started developing the car. Fisker's deliveries also rose 300% sequentially in the fourth quarter.
Yet, customers complaining about Fisker's primary product is the last thing investors in the EV stock want to hear right now, and it's not surprising to see the EV stock falling today.
