Fisker
- Fisker and Lordstown Motors fell Thursday after Goldman Sachs cut its stock ratings for both companies.
- The firm lowered Fisker to a sell rating from neutral, and Lordstown was reduced to neutral from buy.
- Goldman expects General Motors, Ford, Apple and others to escalate competition in the electric-vehicle industry.
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Shares of Fisker and Lordstown Motors dropped Thursday after Goldman Sachs downgraded the ratings of both electric-vehicle makers. The firm cited increasing competition and concerns about product timing.
Fisker was cut to sell from a neutral rating, and its 12-month price target was lowered to $10 from $15. Lordstown was cut to a neutral rating from buy, and while its target was cut to $10 from $21.
Fisker dropped as much as 12%, while Lordstown lost 5% at intraday lows.
Goldman said the downgrades come as multiple companies including General Motors, Ford and Volkswagen plan to accelerate their transition toward EVs as they seek to completely exist the internal combustion engine market.
Meanwhile, the firm noted that several big tech companies such as Apple, Xiaomi and Baidu are considering a larger role in the auto market with a branded product, or through a collaboration with an original-equipment manufacturer.
"Established EV OEMs such as Tesla are also scaling quickly," said Goldman Sachs equity research analysts led by Mark Delaney. "Several of these companies are committing billions of R&D dollars to both powertrain technology and software."
For Fisker specifically, Goldman said while it appreciates the steps it's taking to try to differentiate its upcoming products "we are incrementally concerned about what we believe is the company's late time to market ... as competition increases." Fisker is preparing to enter the EV industry in the fourth quarter of 2022 with its Ocean SUV.
The bank pointed out that Fisker has announced a plan for a "unique follow-on vehicle" with Apple supplier Foxconn that could enter the market around the fourth quarter of 2023. However, "by the time this vehicle may be ramping, the competitive landscape could be even more challenging (including the potential for new big tech entrants via partnerships)."
On Lordstown, Goldman said it's "now more cautious on the ramp for the Endurance truck," after the vehicle ran out of battery after about 40 miles during an off-road race in Baja California, last week. That "suggests to us that there could be more development work to do on the powertrain than we had expected," said Goldman.
"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," said the bank, adding that Lordstown is aiming to start vehicle production in September.