Shares of the electric vehicle company Fisker Inc. (FSR) have jumped more than 15% in the pre-market trading session after it entered into an agreement with Foxconn to jointly develop and manufacture a new electric vehicle under Project PEAR (Personal Electric Automotive Revolution).
The new vehicle which will be sold under the Fisker brand will be commercialized in leading markets such as North America, Europe, China, and India.
While manufacturing will initially begin in the U.S., it will be expanded to other locations with an estimated annual volume of over 250,000 units.
Fisker Chairman and CEO Henrik Fisker said, “Our partnership with Foxconn and the creation of Project PEAR has taken shape with remarkable speed and clarity of vision. In order to deliver on our promise of product breakthroughs from Project PEAR, we needed to rethink every aspect of product development, sourcing, and manufacturing.” (See Fisker stock analysis on TipRanks)
Fisker added, “Our partnership with Foxconn enables us to deliver those industry firsts at a price point that truly opens up electric mobility to the mass market.”
Production of Project PEAR, which is Fisker’s tie-up with Foxconn is scheduled for Q4 2023. Notably, Project PEAR will be Fisker’s second vehicle.
The company plans to start the production of its first vehicle called Ocean electric SUV in Europe in the fourth quarter of 2022. A prototype of the Ocean Electric SUV is expected to be unveiled later in 2021 at the Los Angeles Auto Show.
Last month, Barclays analyst Brian Johnson initiated coverage of the stock with a Hold rating and a price target of $17 (70.8% upside potential).
Johnson believes that Fisker is more capital efficient to launch vehicles and focuses on design while outsourcing production. Furthermore, Fisker looks cheap compared to Tesla provided the company achieves its goals, the analyst added.
Consensus among analysts is that Fisker is a Moderate Buy based on 5 Buys, 3 Holds, and 1 Sell. The average analyst price target of $25.86 implies 160% upside potential to current levels. Shares have dropped 34.5% so far this year.
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