Fisker (NYSE:FSR) stock has been on a wild ride, but it hasn’t taken it alone.
Stocks in the electric vehicle industry have gained prominence over the past few years as countries try to cut down carbon emissions and move towards EVs.
After the EV run-up and fall, FSR stock is pretty much where it was to start the year, but new catalysts may combine with old ones to drive Fisker up again.
The stock is trading lower than the peak and has seen several ups and downs over the past few months.
It was due to the chip shortage in the industry and a low sentiment amongst investors. However, the company has made a few strong moves that make FSR stock a buy for the long term.
Positive Fundamentals, High Liquidity
Fisker recently reported Q1 results and hit $22,000 in sales. The sales were mainly from promotional merchandise and it is not a huge number but the production timeline looks well in place and if the company sticks to it, the stock could move higher.
The company reported a net loss of $0.63 per share and holds cash and cash equivalents of $985 million. Its operating loss is $33 million and Fisker has no debt. Hence, the company can allocate the cash in research and development without worrying about any debt to repay.
Fisker has its Ocean electric SUV in line and it intends to start production in the fourth quarter of 2022 in Europe. The company plans to deliver four types of vehicles by 2025 and it is creating a roadmap for it.
In fact, the company received 16,000 reservations for Ocean SUV by the end of May and most of the reservations are from those who do not own an SUV.
The company plans to price the SUV around $37,500 which will give it an advantage in terms of the pricing in the industry.
Strong Strategic Partnerships
Fisker has signed a few strategic partnerships that strengthen its position in the industry. It has partnered with Sharp Corp, which is a part of the Hon Hai Technology Group to manufacture in-vehicle screens and display systems.
Further, it signed an agreement with that same company to develop and manufacture a new vehicle electric project for PROJECT PEAR which will be priced around $30,000.
It will be sold across markets like Europe, India, China, and North America. The production is expected to begin in Q4 2023 and the annual target volume is over 250,000 units. This will be the second vehicle of the company after Ocean electric SUV.
Most recently Fisker signed a partnership agreement with Onto, it is an EV car subscription service in the U.K. Onto will be the first customer of the company in the U.K. It will be the exclusive rental/subscription partner for the company in 2023 and Fisker will supply Ocean SUV to Onto.
Additionally, the company also signed an agreement with Mekonomen Group for complete after-sales service for customers based in Norway, Sweden, and Denmark. Fisker will deliver Ocean SUV here from Q4 2022 and it has already ensured complete after-sales service with this agreement.
Through each of these partnerships, Fisker has moved closer to the production of Ocean SUV and is hinting at future plans. It is already working towards the sales and after-sales services that will be required once the SUV is ready for delivery.
The company has a clear roadmap and as it begins deliveries next year, FSR stock will soar. With these alliances, Fisker has proved that it is working towards gaining a large market share in the coming years.
The Bottom Line on FSR Stock
Fisker aims to become the number one EV company with the world’s most sustainable vehicles. It looks too good to be true now and until we see production in action, it is only speculation.
However, this EV company is not one that you should overlook. With strong strategic partnerships and a plan in place, it looks like FSR is ready to deliver.
The company has adequate cash to allocate towards capital expenditure and the dip in FSR stock is the perfect opportunity to make the move.
However, investors must remember that FSR stock will test your patience before it pays you back. After all, there is nothing wrong with investing in future potential.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.