May 14 Fisker Inc. (NYSE: FSR) announced that it had partnered with Taiwan-based Hon Hai Technology Group – better known as Foxconn, the primary assembler of Apple iPhones – to develop and manufacture the Personal Electric Automotive Revolution (PEAR) project. According to Fisker, the PEAR project will be a new “revolutionary electric vehicle”. The PEAR will be Fisker’s second production model, after the Ocean SUV.
The first PEARs will be made in the United States; other sites may be chosen to complement this, particularly if the Fisker / Hon Hai company is approaching the expected PEAR unit sales volumes of 250,000 per year. Production of the PEAR, which has a base sticker price of less than $ 30,000, is expected to begin in 4Q 2023.
Publication of quarterly results on May 17
Fisker released its results for the quarter ended March 2021 on May 17. The main aspects of the publication are as follows:
Reservations for Fisker’s Ocean SUV now total more than 16,000 units, up from 14,600 as of March 31, 2021. The increase reflects two major fleet agreements signed in the first six weeks of the second quarter. A reservation costs USD 250 and is fully refundable. Fisker will unveil a prototype of the vehicle at the Los Angeles Auto Show in November and plans to begin commercial production in 4T 2022.
The Fisker SUV is expected to have a selling price range of US $ 37,499 to US $ 69,900, depending on the options chosen in the vehicle. This range is before the effect of any electric vehicle (EV) credit in the United States (currently US $ 7,500 per vehicle).
As of March 31, 2021, Fisker’s cash balance was US $ 985 million, down slightly from US $ 991 million as of December 31, 2020. The company has negligible debt. Fisker’s cash position is approximately 30% of its market capitalization.
Fisker’s operating expenses are expected to be between $ 240 million and $ 270 million in 2021, up $ 30 million from previous estimates. The company states that the entire increase is due to the PEAR project, which was not reflected in previous guidance. Management estimates that capital spending for 2021 will continue to vary between US $ 210 million and US $ 240 million.
Fisker’s Q1 2021 operating cash deficit and Q1 2021 capital expenditures totaled $ 28.8 million and $ 65.7 million, respectively.
|(in thousands of US $, except for outstanding shares)||Quarter ended March 31, 2021||Quarter ended December 31, 2020|
|Operating income||($ 33,098)||($ 31,306)|
|Operating cash flow||($ 28,810)||($ 30,064)|
|Cash – End of period||$ 985,422||$ 991,158|
|Debt – End of period||$ 2,448||$ 2,567|
|Shares outstanding (millions)||293.6||277.3|
Relative performance of the Fisker share
In the figure below, the relative performance of the Fisker share since October 2020 is presented compared to that of Churchill Capital Corp IV (NYSE: CCIV), Lucid Motors’ partner SPAC; Lordstown Motors Corp. (NASDAQ: RIDE), another popular (and currently struggling) EV player; and the S&P 500. The S&P 500 and each of the stock prices are presented as an index where 100 is the uniform starting point.
Fisker stock has been up 11% since October 2020 and has nearly matched the performance of the S&P 500. Churchill Capital has shown the highest returns by far and Lordstown Motors the lowest.
As a start-up, Fisker is well capitalized and is led by a well-known and respected automotive designer. Its Ocean SUV model received a large number of reservations and Fisker agreed to develop and manufacture the PEAR vehicle at an attractive price with a reputable and trusted partner (Foxconn). If Fisker can start production on the Ocean around the time it has announced (fall 2022) and achieve its target gross margins, the company could generate significant cash flow in a few years.
Fisker Inc. last traded on the NYSE at US $ 11.22.
Information for this briefing was found through Sedar and the companies mentioned. The author has no title or affiliation related to this organization. Not a buy or sell recommendation. Always do additional research and consult a professional before purchasing a title. The author does not hold any license.