Fisker (NYSE:FSR) said it will start deliveries of its Ocean electric SUV in Europe on May 5.
In response, FSR stock rose 8% on April 25 and another 8% overnight. Shares were due to open today, April 26, at about $5.30 each, a market capitalization of $1.68 billion.
Drop in the Ocean
Like many other U.S. electric vehicle startups, Fisker has focused on the luxury end of the market. The Ocean is a four-wheel drive SUV that can run nearly 440 miles on a full charge of electricity.
While Fisker has sought to launch in the U.S. and Europe simultaneously, initial deliveries will all go to Europeans who have paid reservation deposits. The car is currently being made by an Austrian contract manufacturer, Magna Steyr.
By the end of 2022, Fisker said it had only made 56 Oceans. It expected testing to be done in March, with regulatory approval in April. Fisker said testing finished on April 6. The company still thinks it can deliver 42,400 vehicles this year, assuming supply chains hold up and approvals come in a timely manner.
I warned readers away from Fisker stock two years ago. I compared founder Henrik Fisker to Preston Tucker, whose failure to break into the U.S. market during the 1940s became a Jeff Bridges movie. That call, made with the stock at $13, looked foolish in November when Fisker traded at $21. The stock is now down 65% since I wrote the article.
If Fisker can deliver on its 2023 promises, it will have more revenue than its current market cap. But it will still face the problem of meeting, or ignoring, the requirements of the Inflation Reduction Act. The current model is both foreign-made and too expensive to win tax credits.
FSR Stock: What Happens Next?
Fisker will now get to test how much market remains for high-end electric SUVs. With both Tesla (NASDAQ:TSLA) and Chinese companies scaling rapidly, it faces stiff competition.
On the date of publication, Dana Blankenhorn held no positions in any company mentioned in this story. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
