Fisker (NYSE:FSR) stock was up as much as 4% this morning on encouraging news related to preorders of its electric vehicles.
The Manhattan Beach, California-based company announced that it has now received 40,000 preorders for its Ocean all-electric sport utility vehicle (SUV), up from 31,000 previously.
Fisker also said that it plans to open up reservations for a limited edition of its Ocean SUV on July 1, 2022. The news seems to have investors excited and the share price has bounced higher today as a result. Prior to today, FSR stock had declined 23% this year to close trading yesterday at $12.90 per share.
What Happened With FSR Stock
In a news release, Fisker said that reservations for its Ocean SUV have now surpassed 40,000. The Ocean sells for an average price of $68,999. Owing to the success of preorders for the Ocean, Fisker announced that it will open preorder reservations for the purchase of a limited-edition Fisker Ocean One SUV on July 1. Fisker said it plans to manufacture 5,000 limited-edition Fisker Ocean One vehicles starting this November.
The company said it anticipates selling out capacity of its Ocean SUVs by mid-2023. Furthermore, Fisker said it does not plan to raise prices on its vehicles this year or in 2023.
However, given the current rate of inflation, the company said it cannot guarantee pricing will remain the same after its current 40,000 reservations have been filled.
Why It Matters
Fisker is a young electric vehicle startup that still needs to prove itself in an increasingly crowded market. Not only is it competing against established automakers such as Ford (NYSE:F) and Tesla (NASDAQ:TSLA), but it also is going head to head against other EV startups such as Rivian (NASDAQ:RIVN). Strong preorders are a positive indication for the company and its stock.
That Fisker is expanding its Ocean SUV to include a limited edition that, presumably, sells at a premium to the standard model, is also positive news for the company and its shareholders. It shows the company is growing, expanding and finding ways to increase its revenue. The expanded production is what analysts like to see from smaller automakers.
What’s Next for Fisker
FSR stock gets a much-needed bump higher today on news of the strong reservation numbers and expanded production capacity. This is great for shareholders who have had to watch as its share price has slid lower over the past year on broad market volatility and as electric vehicle stocks fell out of favor with investors.
That trend looks like it is starting to reverse now, which is also good news for people who own the stock.
On the date of publication, Joel Baglole 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.