Shares of Fisker (NYSE:FSR) surged more than 24% in pre-market trading on Wednesday after the electric vehicle maker said it will partner with Taiwan’s Foxconn Technology Group to assemble its cars. The move follows a 10.1% drop in FSR stock yesterday.
Foxconn, previously known as the primary assembler of iPhones for Apple (NASDAQ:AAPL), will produce FSR’s second model — a higher-volume EV that the car maker expects to start manufacturing in the fourth quarter of 2023.
So far, the company — and investors — have been focused on Fisker’s inaugural model, its Ocean EV, which it is still getting ready to launch in Q4 2022. “Interest in the Ocean continues to build at an encouraging pace, with more than 12,000 global paid reservations as of today. Fisker plans to unveil a production-intent prototype of the Ocean later this year,” according to an announcement earlier on Wednesday.
The deal follows Fisker’s outlier strategy, which links its supply chain to contractors for the ultimate manufacturing and assembly of its electric cars, including an earlier-announced collaboration with Magna International (NYSE:MGA).
“The last thing an EV startup should be looking to do is build its own factory,” founder of the eponymous firm, Henrik Fisker told The Wall Street Journal last year. “I think it’s a really dumb idea, quite frankly.”
FSR Stock Earlier Seen As EV Correction Victim
As recently as last month, pundits raised concerns about how FSR stock might fare in a possible correction in the red-hot EV space.
InvestorPlace writer and IPO Playbook Editor Tom Taulli wrote in early January that since the company came public via a special purpose acquisition company (SPAC) merger transaction in late October, FSR stock investors have had a “crazy ride.”
He raised concerns that investors could lose patience waiting for Fisker to manufacture its first EV. “… two years is a long time for investors to wait – and a lot can happen,” he wrote.
However, although there is no shortage of EV competitors, FSR stock actually stands out quite well from the pack, with its asset-light model that will drive up margins and progressively reduce costs, as Faizan Farooque wrote here last week.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.