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Fisker Remains an Excellent Transitional Play for the EV Evolution

It seems like lately, I’ve been disagreeing a lot with InvestorPlace’s Louis Navellier. So it’s great that finally, with electric vehicle manufacturer Fisker (NYSE:FSR), I have a topic where we’re both in alignment. And don’t think I’m pandering: I own FSR stock and I’ve spoken at length about its profitability potential.

The Fisker logo hangs on display at the November 2011 International Auto Show.
Source: Eric Broder Van Dyke / Shutterstock.com

If I had to summarize my bullish thesis into one concept, I’ll just give you a name: Henrik Fisker. The man behind the brand, Fisker is not just an entrepreneur but one of the world’s foremost automotive designers. He’s responsible for spearheading the aesthetics of several iconic cars, including one of my favorites, the BMW Z8.

Of course, beauty is in the eye of the beholder but come on. When the top automotive companies of the world ask you to sculpt their flagship vehicles, you know you’re doing something right. Therefore, the beauty and the provenance is central to my support of FSR stock.

However, as Navellier pointed out, Fisker now has substance to back up the optimism. As he put it, the company “has stuck to its production timeline.” Thanks to the EV manufacturer’s distinct approach of partnering with other companies to bring separate models to market, management is potentially helping the cause of FSR stock by spreading out risk.

As of the latest data, Fisker is scheduled to start production of its much-anticipated Ocean SUV in November 2022, in partnership with Magna International (NYSE:MGA). Further, designer Fisker stated during a recent investor call that deliveries are on track to hit the U.S. and Europe in late 2022.

Of course, FSR stock has been a huge beneficiary of recent developments. Following a frustrating ebb and flow, shares are up 40% in the trailing month in recent days.

FSR Stock Requires Belief in the Approach

To be fair, FSR stock isn’t without its problems. While production may well be on schedule, that requires faith that the company will stay on schedule. As such, we’re still talking about a pre-revenue company, with all the risk that this status entails.

I’m not going to beat around the bush: it’s not an easy bit of speculation to bet on FSR stock. Even Navellier gave the shares a “B” grade on his Portfolio Grader. I take that to mean good but not good enough to rank among the best investments available.

Other firms, including some speculative outfits, already have units rolled out. They’re not researching and developing the vehicle like Fisker is, readying it for eventual commercialization. However, with FSR stock, it pays to take a note out of the American evangelical’s playbook.

You never see evangelicals make their pitch for the “good life” by starting with the consequences, that is perdition. That’s a last resort when all other measures have failed. Instead, you see them making small talk, gradually building a rapport, then tailoring a message that suits the subject.

It’s the same principle with EVs. Yeah, people love talking about environmental sustainability, responsibility and justice. But most people are not going to embrace full-throated sustainability, especially if it entails a significant cost. Thus, when push comes to shove, many people are uncomfortable about making a commitment to EVs, just like many are uncomfortable making a commitment to the carpenter.

Don’t believe me? The Pew Research Center conducted a survey involving the phasing out of gasoline-powered vehicles. Fascinatingly, it discovered that EVs “get mixed reception from American consumers.”

Here’s my point. You know what would aid the transition to EVs? Making them look as familiar as possible to what most consumers already drive.

Fisker’s Design Advantage is a Big Deal

You might think that Fisker’s aesthetic prowess is an advantage, albeit a small one. I would have to disagree. To me, it’s the crux of why FSR stock, despite its risks, is so compelling.

Interestingly, another Pew report indicated that church attendance in the U.S. has been declining at a rapid pace. But you know what’s not declining? Attendance at megachurches, which continues attracting new members despite the pandemic. The advantage for the latter over the former is familiarity. Megachurches cater to youth through casual clothing, non-traditional structures and of course rock bands.

In other words, they evoke intimacy through a shared bond. It’s the same circumstance with Fisker’s EVs. They’re not oddly shaped nor do they lack a core function like a wheel. Instead, the company’s flagship Ocean looks just like a sleek luxury SUV. The only difference is the source of propulsion.

Likely, it will be much easier for Fisker (compared to much of the competition) to sell its EVs once they hit the showroom floor. Granted, the risk is whether it will get there in the first place. That’s where the faith part comes in. But if you can get over that hurdle, FSR stock is well positioned for growth.

On the date of publication, Josh Enomoto held a LONG position in FSR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.


Article printed from InvestorPlace Media, https://investorplace.com/2021/11/fsr-stock-excellent-transitional-play-for-ev-evolution/.

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