Fisker, Lordstown Could Be EV Latecomers, Goldman Sachs Says In Downgrade

A Goldman Sachs analyst turned bearish on one electric vehicle stock Thursday and dropped their bullish position on another. Here's what EV investors should know.

The Fisker, Lordstown Analyst: Goldman Sachs analyst Mark Delaney downgraded shares of Fisker Inc. FSR from Neutral to Sell and reduced the price target from $15 to $10.

The analyst downgraded Lordstown Motors Corp. RIDE from Buy to Neutral and lowered the price target from $21 to $10.

Why Fisker Could Be Late To The Market: The steps that Fisker has taken to differentiate its upcoming products, such as the ADAS platform; added range; and the usage of recycled materials are commendable, Delaney said in a note.

The analyst said he is incrementally concerned about the company being late to the market given that it has set a timeline of the second quarter of 2022 to enter the market with its Ocean SUV.

Fisker has also announced a plan for a unique follow-on vehicle with Hon Hai Precision Industry Co., Ltd. HNHPF that is scheduled to enter the market in the fourth quarter of 2023, he said.

By the time the second vehicle is ramping, the competitive landscape could be even more challenging, Delaney said.

The manufacturing model alone doesn't guarantee long-term product success, the analyst said.

Aspects such as the efficiency of the powertrain, software and hardware integration, brand and the ecosystem for the product are key to success, according to Goldman Sachs.

Goldman would become more constructive on the stock if Fisker could not only bring differentiated product to the market but also in a time frame that would allow it to establish a mainstream presence in EVs, Delaney said.

Long-term margins, which could benefit from software and services that can readily be monetized through connected vehicles, are also important, he said.

Lordstown's Powertrain, Supply Chain Issues: Lordstown plans to be the first mover in the fleet-focused part of the EV pickup truck market, and this provides an opportunity to be successful in the long run, Delaney said.

Yet recent issues with the Baja race, where the vehicle ran out of battery after about 40 miles, suggest there could be more development work to do on the powertrain than is expected, the analyst said.

"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."

FSR, RIDE Lordstown Price Action: At last check, Fisker shares were down 7.13% to $14.07. Lordstown was up 0.41% at $9.80.

Photo courtesy of Fisker.

Market News and Data brought to you by Benzinga APIs