These 2 EV Stocks Are Trending Right Now
Electric vehicle (EV) stocks have been bringing big gains to shareholders. Well, it depends on who you’re asking. If you ask any recent investors of Churchill Capital Motors IV (NYSE: CCIV) and Tesla (NASDAQ: TSLA), they will disagree with you. That’s because the former has lost almost half of its value over the course of two trading days. Meanwhile, the latter has dropped from its all-time high of $900 per share. That said, if you believe in their long-term potential, there’s no urgent reason to sell, really. As a matter of fact, some investors may even take advantage of the lower prices to increase their positions.
On the flip side, we have Fisker (NYSE: FSR) and other traditional automakers venturing into the space like Ford Motors (NYSE: F) soaring. The recent performance of the best-performing stocks in the EV space is also sending out mixed signals, making it hard for investors to guess what’s next for space. After all, you want to be able to separate the real deal from the hype.
So how do the two companies compare and decide which is likely the better pick for investors? One is an EV startup backed by a legendary automotive designer while the other is a century-old legendary automaker making a shift towards EV. Anyone betting on the mass adoption of EV in the coming decade should be optimistic about the value these companies will be able to bring in the long run.
Fisker Inc. (FSR)
For the die-hard automotive fans out there, the name Henrik Fisker certainly rings some bells. An automotive icon and tech visionary, Henrik has created some of the most iconic vehicles ever on four wheels.
These include James Bond’s famed BMW Z8 and his latest disruption, the revolutionary Fisker Ocean. Given his track record of producing many of the luxury automobile world’s most iconic vehicles, when Henrik designs a car, the world pays attention.
It took Henry Ford three tries to start his own successful car company. Henrik Fisker is on his second try and he’s confident he won’t need a third. Today, he leads Fisker in reimagining the way we move with the world’s most emotionally charged and highly sustainable vehicles. Although his previous startup did not end with a bang, Fisker Inc. is among the more compelling selections when it comes to a sea of electric-vehicle startups.
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Partnership With Foxconn Is Bringing Bullish Signals To FSR Stock
While the world awaits Fisker’s first EV from the automaker’s Ocean line, Fisker has been busy clinching yet another agreement for a second EV. This time, the company has secured a partnership with Apple’s (NASDAQ: AAPL) manufacturer Foxconn. Upon the announcement, FSR stock skyrocketed to its all-time high of $23.75 before closing at $22.58 on Wednesday’s intraday trading.
The collaboration with Foxconn, dubbed “Project PEAR” (Personal Electric Automotive Revolution) is expected to close in the second quarter of this year. The EVs are expected to sell under the Fisker brand, however, a more formal agreement is still in the works. The Foxconn deal will be Fisker’s second major deal in recent months. The company already has a deal with Magna (NYSE: MGA) to produce the Fisker Ocean, its first expected vehicle. Fisker is slated to report its quarterly earnings after hours Thursday.
“We will create a vehicle that crosses social borders while offering a combination of advanced technology, desirable design, innovation, and value for money, whilst delivering on our commitment to creating the world’s most sustainable vehicles,” Fisker CEO Henrik Fisker said in a statement.
After a few decades of staying under the radar, Ford stock appears to be revving back up. While it is still a far cry from its high of around $100 per share twenty years back, it has built up some momentum amid a bright outlook with its new all-electric vehicle, the Mustang Mach-E.
Ford has been working hard to polish its vehicle lineup. If you are a petrolhead, you would have noticed it as well. What’s more, Ford has announced a near doubling of its planned investments in EV to $22 billion through 2025.
From its most recent quarter, the company reported better than expected earnings per share (EPS) by a wide margin. Revenue, however, narrowly missed expectations. On top of its own vehicle line-up, Ford was also an early investor in Rivian Automotive. On January 19, Rivian received a new round of investment funding that valued the company at about $27.6B.
End In Sight For Computer Chips Shortage?
Previously, the shortage of computer chips has put some of the automakers like Ford and General Motors (NYSE: GM) in a tough spot. Automakers had no choice but to temporarily cut down production. That is certainly weighing down on sales. It is not surprising for investors to have concerns about the impact of chip shortages, which are a systemic problem. However, with President Joe Biden planning to sign an executive order directing a review of supply chains to free up supplies for the automotive industry, it will help Ford to navigate the current semiconductor shortages that are plaguing global automakers.
Apart from the recent in-car connectivity deal with Alphabet (NASDAQ: GOOGL), Ford could also be getting a piece of the Oshkosh (NYSE: OSK) USPS contract as an engine supplier, according to Detroit Free Press. From early reports, it did not explicitly mention Ford’s name. But the automaker has long been thought to be an important partner on the Oshkosh bid. Oshkosh won’t use Ford’s transit vans, as originally discussed, but could lean on Ford for engine technology.
FSR Stock Or F Stock?
By 2027, the electric vehicle and autonomous vehicle markets are forecast to reach $800 billion and $700 billion respectively. No doubt, there is a lot of room for Ford to expand into. After all, the trillion-dollar auto market can accommodate multiple big players. You are looking at an established automaker with high exposure to both EV and AV technology. If you believe Ford has the potential to become a force to be reckoned with, would you be willing to bet that F stock will see brighter days ahead?
On the flip side, perhaps you like the potential revolutionary and sleek design of Fisker. You may also be comfortable with the higher volatility. Then, Fisker may be your cup of tea. Henrik Fisker may have lost his first race with Elon Musk, but he sure isn’t giving up. And he is making a comeback. If you believe the company has what it takes to catch Tesla, then be sure to put FSR stock on your watchlist.