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Why Fisker Is A Good Speculative Bet On EV Growth

Mar. 01, 2021 12:26 PM ETFisker Inc. (FSR)MGA, NIO, TSLA, XPEV, FXCOF, MG:CA21 Comments


  • FSR saw shares soar over 50% the past week on a flurry of news developments, bucking the trend in the overall EV valuation crunch.
  • With just about seven quarters until planned launch, the intense speculative trading has increased valuation significantly and increases risk.
  • However, FSR remains a solid bet for its long-term potential due to strategic partnerships and volume, a decent balance sheet, and a 'safe' valuation.

As the EV industry faces a valuation crunch, one name, Fisker (FSR), stands out from the rest, rising over 50% this past week and nearly 75% in just three days, after a batch of analyst upgrades, a memorandum of understanding with Hon Hai Technology [Foxconn (OTCPK:FXCOF), TPE:2317], and earnings showing more progress in reservations. Although the extremely optimistic, speculative buying seems to have gone too far too soon due to revenues still about seven quarters away, Fisker still remains a solid choice for long-term EV growth from its strategic partnerships and volume, a decent balance sheet, and a 'safe' valuation.

Strategic Partnerships and Large Volumes

Fisker is taking a somewhat unconventional approach to vehicle manufacturing, utilizing established manufacturers instead of building out its own in-house factories, lending to an asset-light model. Fisker will be working with Magna (MGA) in Europe to build three out of the four models planned by 2025, and recently signed a memorandum of understanding with Foxconn to develop the second model, yet to be unveiled.

Why is this good? Outsourcing vehicle manufacturing keeps Fisker's expenses at a minimum, allowing it to focus expenditures almost purely on technological/R&D advancement. Thus, Fisker can focus on UI, design and software in-house, while working with Magna to develop FM29 and Fi-Pilot ADAS/AV. It also minimizes execution risk to a degree since Magna's factories are already established and up-and-running; there's no build-out occurring from scratch. Fisker can find a quicker route to market under this system, estimating idea to launch times of about 29 months, compared to a traditional 60 months, as well as significantly less costs until start of production.

Graphic from Fisker

Leveraging existing, experienced manufacturing facilities also ramp up the production timeline and accelerating scale of production. Fisker will incur lower production costs, letting the Ocean's base model be competitively priced

This article was written by

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Analyst’s Disclosure: I am/we are long FSR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (21)

Tales From The Future profile picture
Fisker is full of hot air and broken promises. Details here:


It is only public thanks to the entire EV sector engulfed in bubble madness.

The valuations of these companies (some with ZERO REVENUE, including Fisker) have no connection to fundamentals.
MS clients whom made $Billions on TSLA is now putting some of those gains in FSR I bet....

Fisker Inc | North America
The Foxconn M1H Open EV
Platform: Fisker’s Validation
Takes a Big Leap
Fisker’s growth trajectory is suddenly tied to the largest manufacturer in the
world (Foxconn) who has ambitions of being a major force in the largest IoT
market in the world (autonomous cars). In our opinion, Magna and Foxconn are
the Michael Jordan and Lebron James of contract manufacturing. And both of
these titans have something in common: they’re betting on a little company with
roughly 1/100th the market cap of Tesla. They’re betting on Fisker.
Think we’re going too far? That’s ok. But before you dismiss the idea, I strongly
suggest you go to this website right now: www.foxconn.com/...
platform.....Morgan Stanley

So go short FSR please..I happy to add to my 2023 leaps the lower FSR goes
Tales From The Future profile picture
@PA You quote Adam Jonas? He is the Henry Blodget of EV stocks and SPACs.

Kids, go google what happened with Henry two decades ago in the dotcom age.
Tales From The Future profile picture
@Tales From The Future I see that the author of this article is very young:
"Damien Robbins. BA Business, 21 years old."

Blodget committed dotcom manipulation before Damien was even born.

No offense, but sometimes it pays to look into financial history to see the same shenanigans and conflicts of interest repeated again and again.

SPACs today, dotcom stocks back then.
Hampton108 profile picture
If you like the symbol FSR, then but FSKR or just FSK and you’ll be much happier...IMO
Now pumping for FSR, the new lover of EV rather than CCIV (aka Lucid Motors) ?
OptionLover profile picture
Look at track records of Henry Fisker to see how he started companies in the last 25 years as ALL OF THEM ended in bankruptcy. So, I wait for the entry point to short ! as Fisker will run out of saliva to promote.
There are many misinformation/fake news that trying to kill Tesla, this is the latest one:

This news is written by Jack Denton of Marketwatch.com, the title says China, but nothing is mentioned about China and emphasizes Tesla sales in Europe (smaller market than China and US). Read below for sales in 2020 between VW (largest sales in Europe) and Tesla. Wait until Berlin Gigafactory on line in July this year 2021

Tesla’s share of the critical European battery-electric-vehicle market crumbled in the first month of 2021, and China has taken the top spot from Europe in the EV race, according to new research.

Last year, Tesla made up just 13% of the European market despite a smaller proportional decline in the number of vehicles it delivered — around 10% — from 109,000 in 2019 to nearly 98,000 in 2020.

Total VW BEV sales in 2020 is nearly 134,000 battery electric vehicles vs Tesla ‘s 500K
Latest News about Fisker:

Fisker says that it has given up on solid-state batteries after having announced a “breakthrough” that was supposed to enable “500 miles of range and 1-minute charging” in its electric cars.
The CEO said in an interview with The Verge:

The solid-state battery (similar to the one used by QuantumScape ), that we worked on, that just doesn’t have a future at this point in time in the near future. And I don’t see us continuing with that particular development at all.”

There are many laws firms suing QuantumScape, this is one of many law firms:

The Schall Law Firm, a national shareholder rights litigation firm, announces the filing of a class-action lawsuit against QuantumScape Corporation ("QuantumScape" or "the Company") (NYSE:QS) for violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission.

According to the Complaint, the Company made false and misleading statements to the market. QuantumScape dramatically overstated the purported success of its solid-state batteries, including their battery power, life, and energy density. The Company was unlikely to scale its battery technology to the multi-layer cells necessary to run electric vehicles. Based on these facts, the Company's public statements were false and materially misleading throughout the class period. When the market learned the truth about QuantumScape, investors suffered damages.
No product to touch, feel, evaluate...just wish, hope, and prayer. The ultimate cart before the horse buy.
SA-NJ52 profile picture
I get that there is a lot of positive things to say about Fisker.

History suggests that just like at the turn of the last century, everybody and their dog was trying to get into the car business.

At this point I have more faith in the established car companies.

Citing the AAPL model for outsourcing car production is irrelevant.

Your phone lasts 2-3 years. If Steve Jobs were alive, he would want you to replace your phone every year. This is not the case with cars. Phones are a throwaway item now but cars are not. You need a dealership network, not vending machines.

Jobs replaced his car every 6 months so he did not have to put license plates on the car.

I can still get parts for my 1948 Chevy Fleetmaster. GM actually sent me the pedigree for the car.


So for now, I will stick with my winners - GM and F. Yes I missed the TSLA boom but I fail to see how this company will succeed given the onslaught of competition from Fisker and other startups.

"I get that there is a lot of positive things to say about Fisker."
You know back in 2011, Fisker was being talked about as having an upcoming sedan that would beat Tesla's upcoming Model S? It's 10 years later, and they have failed to put a car out in the market. They still might compete, but until then, I thing there are more negative things than positive.

"At this point I have more faith in the established car companies."
Based on what evidence? Are you a fan of the Leaf or Bolt? What evidence have we seen of a gearhead legacy company putting out a car that can beat the specs of a Tesla? Not to even mention the software.

"I can still get parts for my 1948 Chevy Fleetmaster. "
BEVs will alst 3x longer than ICE.
Tales From The Future profile picture
@WillLong That “old” Fisker company (since reborn as Karma Automotive, owned by Chinese investors post its bankruptcy) has cut ties with Fisker and is completely unrelated to the new Fisker Inc., trading as $FSR.

Just as a clarification.
@Tales From The Future
I know the story. BUt let me be skeptical until I test drive their car.
CabalFollower profile picture
Why Fisker Is A Good Speculative Bet On EV Growth. FSR using the Apple model to outsource and partner if fact per Foxconn deal watch out for FSR and Apple to partner up.
OptionLover profile picture
@reddog3 Where is the PROFIT and REVENUE ?
CabalFollower profile picture
@OptionLover DX investors/board members Thomas Akin, Barry Igdaloff work with past DX investors Fortress via CMO 2000-03 to reorganize $NOVC they have accumulated 87M shrs of NOVC 46M at pennies (ex DX executives Scott Hartman, Lance Anderson, & CIO Mike Bamburg were removed by these investors. Igdaloff resigned from DX Board after 20 years buried in 9/3/20 8K, on no disclosure became Chairman of NOVC Board) Fortress Manages $NRZ and per 10k 2020 reaped $190M cash from $NRZ ($170M Mgt Fees 2019 + $20M Dividends). Fortress is owned by SoftBank $SFTBY, $NRZ was separated from $DS Drive Shack formerly called Newcastle NCT by Fortress.
Fortress/EJFcap + Mass Mutual sub-Barings MM own 51% in $NOVC which I believe will copy at $NOVC Fortress' reorganization blueprint used at $DS/$NRZ by:
1. Separating $NOVC ex-MREIT that operated like NRZ - Novastar Financial NFI which holds rights to most $3B Portfolio RMBS/Non-QM loans 6% wt. aver coupons aka nuclear fuel to restart MREIT/NFI.
2. Second co NOVC owns is www.healthcare-staffing.com which Fortress can position as Healthcare SPAC but tax free because of $730M NOLs. NOVC NOLs shield taxable income & Cap Gains from taxes.
WSJ named Fortress CEO New Subprime/Non-QM King & he will show it again at $NOVC. Fortress & EJF hide their ID behind CDOs that own 31.3M shares (CDOs also hold all of NOVC only Debt to exit Ch 11) but trust me they are the economic owners that control NOVC today + MM 19.3M shrs.
By concealing their reorg plans they allow Boulay Grp (Top 200 CPA firm) to use GAAP to conceal both NOVC $730M NOLs and Rights to most of $3B portfolio of rich, seasoned collateral assets that can be leveraged/resecuritized at NIMs net int margins close to 5% creating a new dividend. My est $3.75/one NOVC share which trades 2-24 cts over last 3 weeks, more than $NRZ 2019 dividend of $2.00/share. On No News, No 2020 Proxy & No shares available NOVC trades 717K and 640K shares 3/2 and 3/1 9M have traded since 2/8/21
OptionLover profile picture
@CabalFollower Thank you, I passed, no interest as I knew what I'm doing.
Wish I could’ve bought more when it was at 15$. May add more on dips, but i like the look of their car. Decent pricing, as long as they can actually deliver these vehicles this can be a great company.
Tales From The Future profile picture
@Cubs34 Why is $15 a good price or a bargain in your view?

My related question:

Why is Fisker worth almost 2X Mazda today (in terms of market cap)?

PS: Mazda sells around 1.5 MILLION cars per year.
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