As the Fisker (FSR) stock price surges, potential risks remain

on Apr 27, 2023
  • Fisker share price has jumped sharply in the past few days.
  • The company expects to produce over 42k cars this year.
  • There are risks as a pricing war goes on and because of its unproven business model.

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Fisker (NYSE: FSR) stock price has been one of the best-performing electric vehicle (EV) stocks this week even as Tesla slumped. The shares jumped to a high of $6.26 on Wednesday, the highest point since March 29.

Why did FSR stock go up?

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Fisker is one of the top EV companies that is challenging Tesla and other companies like Lucid and Rivian. The company differs from other popular EV companies in that it does not manufacture these cars. Instead, like Apple, it does the research on its vehicles and then outsources the manufacturing process. While this process is good, it is still unproven.

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Fisker made headlines when it started selling its new vehicle, Fisker Ocean. In its recent results, the company said that it aimed to deliver ~42,400k vehicles this year. If this happens, it means that the company will generate at least $1.4 billion since the car starts at $37,500. 

This is a notable number since Rivian aims to deliver 50k cars this year after it sold 24k in 2022. Therefore, I believe that Fisker is getting more ambitious in its projections. 

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The most recent Fisker news is that the company revealed that it had received authorization to start selling its cars in Europe. It now expects to start delivering cars to Europe on May 5. The company also hopes to start vehicle deliveries to the UK in the coming months. 

Most importantly, Fisker is flush with cash as it starts to ramp up production. It has over $700 million in cash and its order book is still strong. The company has over 65,000 in vehicle reservations.

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The main risk for the company is that it is using an unproven business model that could prove costly if the contractor does not perform. The other big risk is the ongoing price war in the EV industry. Companies like Tesla and Ford have all slashed prices, which could put pressure on other companies to follow suit. 

Fisker stock price forecast

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FSR chart by TradingView

On the daily chart, we see that the FSR stock price has been in a downward trend for months. It has dropped from a high of $23.55 in November 2021 to a low of $4.27. It has now bounced back to a high of $6.31, which was the lowest level on October 11. The shares have moved slightly above the 25-day moving average.

Therefore, I suspect that the shares will resume the bearish trend as sellers target the key support at $5. 

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