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Fisker Inc. , an electric vehicle (EV) startup, is currently under scrutiny by U.S. regulators as the National Highway Traffic Safety Administration (NHTSA) has opened an investigation into braking issues concerning its inaugural model, the 2023 Ocean crossover. The NHTSA's Office of Defects Investigation (ODI) is assessing nine complaints, one of which involves a crash and injury. The investigation adds to Fisker's challenges as it is already grappling with lower-than-expected demand, unmet sales goals and a recent shift in its sales strategy.
Fisker, which went public in 2020 through a merger with a special purpose acquisition company, began delivering its Ocean SUVs in June 2023. The SUV's launch faced delays due to software readiness issues. Since it hit the roads, the NHTSA has received a total of 19 complaints, ranging from brake loss and gear shifter problems to a driver door malfunction and instances of the vehicle's hood unexpectedly opening on the highway.
The NHTSA's probe specifically focuses on a "partial loss of braking over low-traction surfaces" without warning the driver, resulting in a sudden increase in stopping distance. Complaints also mention challenges with Ocean's regenerative braking system. The investigation classifies Ocean's braking problems as a "preliminary evaluation," aiming to comprehensively understand the issue and assess potential safety risks.
The NHTSA probe comes at a challenging time for Fisker, which has been grappling with demand falling below expectations and struggling to achieve its internal sales targets. Fisker manufactured 10,142 Ocean crossovers for the global market in 2023, with production taking place at a contract manufacturing facility in Graz, Austria. However, actual deliveries amounted to only 4,700 units, primarily concentrated in Europe and the United States, which are its initial target markets.
Recently, the company announced a shift in its sales strategy. Originally opting for a direct-to-consumer model, Fisker decided to abandon this approach in the United States, favoring the recruitment of franchised dealers instead. This strategic adjustment is part of the company's plan to establish 50 dealerships in the United States and Canada, taking over sales and service operations from the direct-to-consumer model.
The announcement of the change in sales strategy affected Fisker's stock price, exacerbating the company's challenges. Over the past 12 months, Fisker's stock has tanked 86.5%. After the news of the NHTSA probe, Fisker fell below $1/share. Yesterday, it extended its losses as it declined around 7.5% and hit a 52-week low to close the session at $0.893/share.
The Zacks Consensus Estimate for VLVLY’s 2024 sales and earnings suggests growth of 4.2% and 73.1%, respectively, from the 2023 estimated figures. The EPS estimates for 2023 and 2024 have improved by 4 cents and 3 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for TM’s fiscal 2024 sales and earnings implies year-over-year growth of 11% and 45.4%, respectively. The EPS estimates for 2024 and 2025 have moved up by $2.37 and 28 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for NIO’s 2024 top and bottom lines indicates growth of 43% and 39%, respectively, from the 2023 estimated figures. The estimates for 2023 and 2024 loss per share have narrowed by 1 cent and 4 cents, respectively, in the past 30 days.
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Fisker (FSR) Falls Below $1 Amid NHTSA Probe Over Braking Issues
Fisker Inc. , an electric vehicle (EV) startup, is currently under scrutiny by U.S. regulators as the National Highway Traffic Safety Administration (NHTSA) has opened an investigation into braking issues concerning its inaugural model, the 2023 Ocean crossover. The NHTSA's Office of Defects Investigation (ODI) is assessing nine complaints, one of which involves a crash and injury. The investigation adds to Fisker's challenges as it is already grappling with lower-than-expected demand, unmet sales goals and a recent shift in its sales strategy.
Fisker, which went public in 2020 through a merger with a special purpose acquisition company, began delivering its Ocean SUVs in June 2023. The SUV's launch faced delays due to software readiness issues. Since it hit the roads, the NHTSA has received a total of 19 complaints, ranging from brake loss and gear shifter problems to a driver door malfunction and instances of the vehicle's hood unexpectedly opening on the highway.
The NHTSA's probe specifically focuses on a "partial loss of braking over low-traction surfaces" without warning the driver, resulting in a sudden increase in stopping distance. Complaints also mention challenges with Ocean's regenerative braking system. The investigation classifies Ocean's braking problems as a "preliminary evaluation," aiming to comprehensively understand the issue and assess potential safety risks.
The NHTSA probe comes at a challenging time for Fisker, which has been grappling with demand falling below expectations and struggling to achieve its internal sales targets. Fisker manufactured 10,142 Ocean crossovers for the global market in 2023, with production taking place at a contract manufacturing facility in Graz, Austria. However, actual deliveries amounted to only 4,700 units, primarily concentrated in Europe and the United States, which are its initial target markets.
Recently, the company announced a shift in its sales strategy. Originally opting for a direct-to-consumer model, Fisker decided to abandon this approach in the United States, favoring the recruitment of franchised dealers instead. This strategic adjustment is part of the company's plan to establish 50 dealerships in the United States and Canada, taking over sales and service operations from the direct-to-consumer model.
The announcement of the change in sales strategy affected Fisker's stock price, exacerbating the company's challenges. Over the past 12 months, Fisker's stock has tanked 86.5%. After the news of the NHTSA probe, Fisker fell below $1/share. Yesterday, it extended its losses as it declined around 7.5% and hit a 52-week low to close the session at $0.893/share.
Zacks Rank and Key Picks
Fisker currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Volvo (VLVLY - Free Report) , Toyota (TM - Free Report) and NIO Inc. (NIO - Free Report) . While VLVLY and TM sport a Zacks Rank #1 (Strong Buy) each at present, NIO carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VLVLY’s 2024 sales and earnings suggests growth of 4.2% and 73.1%, respectively, from the 2023 estimated figures. The EPS estimates for 2023 and 2024 have improved by 4 cents and 3 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for TM’s fiscal 2024 sales and earnings implies year-over-year growth of 11% and 45.4%, respectively. The EPS estimates for 2024 and 2025 have moved up by $2.37 and 28 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for NIO’s 2024 top and bottom lines indicates growth of 43% and 39%, respectively, from the 2023 estimated figures. The estimates for 2023 and 2024 loss per share have narrowed by 1 cent and 4 cents, respectively, in the past 30 days.