Fisker Inc’s (NYSE:FSR) ability to produce an affordable EV will be the result of the Company’s plan to outsource the manufacturing and maintenance work to partners including Magna International
Capital Ideas Media | July 23, 2021 | SmallCapPower: This next idea is courtesy of one of our long-time readers Michael W.
Fisker Inc. (NYSE:FSR) is a U.S. based pending manufacturer of sports utility electric vehicles (EV) to be branded as ‘Ocean’. And while Tesla is dominating the high-end luxury EV market, Fisker is expected to successfully target SUV drivers with price points starting at less than $30,000 to as much as $69,000.
Michael points out that Fisker’s ability to produce an affordable EV will be the result of the Company’s plan to outsource the manufacturing and maintenance work to partners including Magna International and Apple Inc. contractor Foxconn, thus Fisker will not be required to make a substantial investment in supply chains and plants.
As well, significant upside potential exists with Fisker’s future entry into the flexible leasing model, similar to a subscription model, which could substantially expand its total addressable market by appealing to younger drivers who don’t want to make a long-term commitment to one vehicle, according to Citi analyst Itay Michaeli.
Mr. Michaeli suggests that based on web traffic data the Company has the potential to build a strong brand. There are currently more than 16,000 reservation holders for the Fisker Ocean.
Fisker is even planning to build an EV for Pope Francis.
Morgan Stanley analyst Adam Jonas, meanwhile, has an “Overweight” rating and a $40 price target on Fisker shares, after the Company reported a smaller than expected operating loss and a stronger than expected cash position in Q1 but “importantly” reiterated its Q4 2022 production target for the Ocean EVs “with confidence.”
Cleantech stocks, including Fisker, have taken a hit after running up following the election of U.S. President Biden and the Democrats taking control of Congress, but the future of driving is definitely ‘green’ and the recent selloff could provide an attractive entry point for long-term investors.
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