Fisker (NYSE:FSR) stock is up nearly 3% today after the electric vehicle startup announced that it has begun taking preorders for its second car called the PEAR.
So what do you need to know?
To start, PEAR is an acronym that stands for the “personal electric automotive revolution.” Name aside, PEAR is a five-seat passenger car that the company says will retail for about $29,900, making it one of the more affordable fully electric vehicles available to consumers. Fisker says deliveries of the PEAR will begin in 2024.
News that the company is now taking preorders is positive for FSR stock, which, before today, had fallen 30% year to date. In the past 12 months, the share price has declined 40%.
What Happened With FSR Stock
In a news release, Fisker called the PEAR a “compact, five-passenger urban EV.” Its delivery in 2024 comes after Fisker’s first vehicle, the all-electric Ocean sport utility vehicle (SUV), which is scheduled to begin rolling off assembly lines this November. Consumers can reserve a PEAR with a $250 deposit. Fisker said it plans to manufacture the PEAR in Ohio with a minimum initial production of 250,000 vehicles a year.
“PEAR will feature the very latest technology in a beautifully designed, affordable urban mobility device,” said CEO Henrik Fisker. “It’s an exciting vehicle and an exciting time for the company as we expand our lineup.”
The pricing of the PEAR sets it apart from electric vehicle rivals Tesla (NASDAQ:TSLA) and Lucid Motors (NASDAQ:LCID), who are focused primarily on producing luxury EVs. Tesla’s cheapest electric sedan, the Model 3, has pricing that ranges from $45,000 for the base version to nearly $60,000 for the fully loaded edition. Lucid Motors’ Air sedan costs nearly $120,000 at the top end of its range. Selling the PEAR under $30,000 could appeal to price-conscious consumers who still want an electric vehicle.
Why It Matters
Getting to the preorder stage with the PEAR electric vehicle shows that Fisker is delivering on its promise to shareholders to begin production of its electric vehicles. Investors are responding positively to the news, which is helpful to FSR stock.
The company’s share price had been hurt by reports that the U.S. Securities and Exchange Commission (SEC) was planning to investigate its combination with a special purpose acquisition company (SPAC) that brought the company public. However, it was announced last December that the SEC is not investigating Fisker’s SPAC deal.
More broadly, Fisker moving into production on both its Ocean SUV and PEAR compact car shows that the electric vehicle market is maturing and becoming more competitive. Tesla is no longer the only name when it comes to electric vehicles. And while global automakers such as Ford (NYSE:F), General Motors (NYSE:GM) and Toyota (NYSE:TM) are pushing aggressively into the EV space, so too are a number of smaller startups such as Fisker. This will benefit consumers who will have greater choice about the type of electric vehicle they want and the price they’re willing to pay.
What’s Next for Fisker
FSR stock gets a nice bounce today on news that it’s taking preorders for its PEAR project. This leg higher will no doubt be welcomed by shareholders who have watched the company’s share price slide lower in recent months. However, for the stock to rally higher and sustain its gains over the long term, Fisker will need to begin deliveries of both its Ocean SUV and PEAR car. Making good on deliveries and generating sales will put the proof in the pudding for Fisker.
On the date of publication, Joel Baglole held a long position in GM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.