Fisker Stock falls after production guidelines cut

Electric vehicle startup Fisker delivered a flurry of disappointing news on Tuesday, dragging the stock down. You’re here

and the challenge of navigating regulatory approvals in Europe, are partly to blame.

For the first quarter, Fisker (ticker: FSR) reported a loss of 38 cents per share on sales of less than $1 million. Wall Street was looking for a loss of 31 cents per share and about $5 million in sales, according to FactSet.

More importantly, the company said it expects to produce 1,400 to 1,700 vehicles in the second quarter and 32,000 to 36,000 for all of 2023. The number for the full year was down from to the 42,000 to 43,000 units the company planned to produce in February.

“We (were) late to get approval,” said CEO Henrik Fisker Barrons, referring to the process of getting a car sold approved by local regulatory authorities. It means the company started European production later than planned, leaving a yearly production shortfall, but the CEO says Fisker is still on track to manufacture 6,000 SUVs a month by the end of the year. .

Deliveries of the vehicles to consumers began on May 5. Fisker (ticker: FSR) finalized its final approvals from European regulators in April, allowing the company to start production and sales of its Ocean SUV. US sales are scheduled for June.

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Investors are reacting to the lower full-year production forecast with some nervousness. Shares were down more than 13% in early trading on Tuesday, while the S&P 500 and

Nasdaq Compound

decreased by 0.5% and 0.6%, respectively.

Going from less than 2,000 vehicles in a quarter to nearly 20,000 by the end of the year is aggressive, but Fisker is confident it can do it with its production partnership.

Remember that the company does not have its own manufacturing capacity. Magna International (MGA), which has been assembling cars for decades, builds the car at its factory in Austria. Fisker pays for most of the tooling used to manufacture the parts.

Investors could also worry that reservations for Fisker electric vehicles are sitting at around 70,000, flat with the level three months ago. “The whole market has been somewhat battered by Tesla’s aggressive price cuts,” the CEO added. “We’ve probably seen a lot of people sticking it out… buy a Tesla

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simply because they couldn’t resist a bargain.

Fisker has not changed the prices of its Ocean SUV. It was able to do this partly because it did not produce cars. Battery costs, which have driven some price increases for other EV makers, have fallen from peak levels set at the end of 2022.

Another area of ​​interest for investors is the company’s second vehicle, the PEAR, which Fisker is building with Hon Hai Precision Industry (2317. Taiwan), better known as Foxconn.

The PEAR is slated for sale in early 2025. That’s a few months later than expected and is partly a function of new electric vehicle tax credits in the United States. Fisker must source and manufacture batteries and batteries in the United States to access the tax credit. .

Using partners to build vehicles has kept the cash Fisker needs to fund its operations below peers such as Lucid (LCID), which built and owns its manufacturing plant in Arizona. Wall Street expects Fisker to use around $325 million in 2023.

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Lucid is expected to use around $3.1 billion in 2023.

This cash usage figure could increase. Fisker still expects to spend between $535 million and $610 million in 2023 to run its business, but less production also means less sales revenue to offset that amount.

Fisker ended the quarter with about $650 million in cash on its books. Another $70 million is coming in due to value-added tax claims and shares issued using Fisker’s $350 million market share program.

As of Tuesday’s open session, Fisker stock was down about 34% in the past 12 months. Shares of Lucid are down about 58% over the same period.

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General Motors (GM) shares fell about 15%, while the S&P 500 traded roughly flat.

Rising interest rates, high car prices, a slowing economy and increased competition from electric vehicles have hit shares of most automakers and electric vehicle start-ups.

Write to Al Root at

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