Let’s be honest. Investors in Fisker (NYSE:FSR) haven’t exactly been cleaning up lately. It’s tough to stay on board with the electric vehicle maker’s ambitious vision as FSR stock trends relentlessly downwards.
However, if you have a speculative streak and truly believe in the “buy low, sell high” philosophy, then there may be a terrific opportunity here.
Not long ago, on April 22, the world celebrated Earth Day. This event should remind everyone — investors included — that the green energy movement is alive and well.
And Fisker is poised to disrupt the combustion engine-dominated automotive market with vehicles that can electrify fleets while offering surprising cost savings.
A Closer Look at FSR Stock
Prior to July, 2020, there was a shell company called Spartan Energy Acquisition. At the time, this company traded under the ticker symbol SPAQ, and the share price was close to $10.
On July 13 of that year, it was revealed that Spartan Energy Acquisition would merge with Fisker. With that, the share price promptly jumped above $16.
Then, in October, Fisker closed the business combination with Spartan Energy Acquisition.
After that, FSR stock wiggled and wobbled around. February, 2021 turned out to be a great month for the investors, though, as the share price catapulted to a 52-week high of $31.96.
Unfortunately, the stock declined sharply after that. By May 5, it was below $12.
Clearly, the market wasn’t ready to value FSR stock at $32. On the other hand, at least we now have evidence that the stock is capable of getting to that level.
And while it’s undoubtedly a speculative bet, contrarians might consider accumulating shares of Fisker at this more favorable price point.
Cost Savings, By the Numbers
On thing that I like about Fisker is the company’s quest to provide electric vehicles that aren’t too expensive.
For example, the Fisker Ocean has a manufacturer’s suggested retail price (MSRP) that starts at $37,499. Plus, the company offers a flexible leasing model starting at $379 per month.
Moreover, on Earth Day, Fisker called upon the current U.S. presidential administration to implement a policy that would make Fisker’s automobiles even more affordable.
In particular, the company is asking the government to enact a policy informally known as “75 And More for 55 And Less.”
This would involve a rebate of $7,500, plus $10 per mile of certified driving range, for battery electric vehicles priced at $55,000 or less.
As Fisker explains, the math would work in favor of cost-conscious consumers:
“Under the Fisker proposal, an electric vehicle priced at $45,000, powered by a certified 300-mile range battery, would receive a point-of-sale rebate of $7,500 – and an additional $3,000 for the battery range for a total of $10,500, lowering the transaction price to $34,500.”
Furthering Fleet Electrification
Hopefully you were able to keep up with all of those numbers. In any case, this would evidently translate to substantial savings compared to “the current average cost of a new car at $40,000.”
Even beyond the potential cost savings of a major policy change, Fisker is clearly attempting to revolutionize the automotive industry as we know it.
This includes the fleet market, which Fisker is preparing to penetrate on a multi-national scale.
It wasn’t long ago, in fact, when Fisker exceeded 14,000 reservations for its Ocean SUV – and this milestone was achieved, in part, due to a boost in interest and orders from the global fleet market.
During the fourth quarter of 2020, Fisker signed its first significant fleet order. This order was for 300 vehicles from Viggo, a Danish ride-hailing service.
There’s strong potential for Fisker to generate revenues in the fleet market.
As The Climate Group points out, through their work, “over 100 of the world’s leading companies are making commitments across over 80 markets to transition their fleets to EV … by 2030.” This alone would represent five million vehicles.
The Bottom Line
There’s no denying that FSR stock has been beaten down. Yet, risk-tolerant investors may see an opportunity here.
Fisker is truly an electric vehicle manufacturer like none other. The company’s vision is bold, ambitious and unique.
If this sounds appealing to you, then it might be time to consider accumulating shares of FSR stock. And with that, you can take part in a movement that might change the automotive market as we know it.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
David Moadel has provided compelling content — and crossed the occasional line — on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.