These EV Startups May Already Be Running Out Of Time

Goldman Sachs downgraded new EV stocks Fisker (FSR) and Lordstown Motors (RIDE), citing platform issues and rising competition. FSR stock fell, while RIDE stock rose.


In a note to clients Thursday, analyst Mark Delaney lowered Fisker stock to sell from neutral and trimmed the price target to 10 from 15. Meanwhile, he downgraded Lordstown stock to neutral from buy and slashed the price target to 10 from 21.

FSR Stock Downgrade

The rapid transition toward EVs by the likes of General Motors (GM), Ford (F), Volkswagen (VWAGY) and others poses a risk to FSR stock, Delaney said, citing its extended timeline.

Fisker is planning to launch its Ocean SUV in Q4 of 2022, with mass production coming a year later. It also hopes to follow up with another vehicle made with Foxconn that could enter the market around Q4 of 2023.

Additionally, several big tech companies such as Apple (AAPL) and Baidu (BIDU) are now planning to or considering a larger role in the auto market.

Established EV OEMs such as Tesla (TSLA) are also scaling quickly, Delaney wrote. “Several of these companies are committing billions of R&D dollars to both powertrain technology and software,” he said. 

Delaney added that while Fisker is taking steps to differentiate its upcoming products such as a new ADAS (advanced driver assistance systems) platform, added range and using recycled materials, the company’s late time to market is a concern. 

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RIDE Stock Downgrade

Delaney said Lordstown’s plan to be the first mover in the fleet-focused segment of the EV pickup truck market gives it an opportunity to be successful in the long-term.

“However, the company’s recent issues with the Baja race on 4/17 (the vehicle ran out of battery after about 40 miles, albeit on challenging off-road terrain) suggests to us that there could be more development work to do on the powertrain than we had expected,” he wrote.

“This factor, coupled with the global auto supply chain challenges that are making it difficult to obtain parts, could increase the probability that the company’s market entry will be delayed and/or could occur at a more measured pace than we had expected.”

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EV Stocks

FSR stock fell 5.3% to 14.35 on the stock market today, continuing to hit resistance at the 50-day line, according to MarketSmith chart analysis. RIDE stock reversed higher to rally 2% to 9.94.

EV stocks have been hit hard amid a market rotation out of growth stocks, but industry leader Tesla has fared better than most.

Tesla, which according to a German media report may have to delay opening its plant there until October, slipped 1% to 735.58 on Thursday. Shares are in a cup base with a 900.50 buy point.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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