Fisker (FSR) is is now in compliance with New York Stock Exchange listing requirements after submitting it’s 10-Q.
Meanwhile, China’s BYD (BYDDY) is launching its popular Han sedan in the United Arab Emirates, though it is unclear when deliveries will begin. The automaker also announced it has rolled its 6 millionth “new energy vehicle” off the production line at its Zhengzhou factory.
Yahoo Finance’s Seana Smith and Brad Smith weigh in on the ongoing price wars and what it would take for a significant transition to EVs.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
SEANA SMITH: All right, shares of Fisker are on the move today after the company submitted its quarterly report, which showed that it’s in compliance with NYSE listing requirements last week that the company received a notice that it was not aligned with NYSE standards because of a late filing with the SEC. We’re looking at gains of just about 3% in early trading.
Now, digging into this in the 10-Q that was released after the report following this delay was that some expenses were incorrectly recorded in the prelim results that Fisker did release, $4 million of an increase in net losses here. They also have named a new executive vice president of finance and accounting. The company has gone through two chief accounting officers in just a month.
We know delivery production, the strategy surrounding that for Fisker, has been a big focal point for strategists, for analysts over the last several quarters. Looking ahead, demand and production issues are likely going to be the driver of the stock price here. At least at this point, we’re trading just over $2 a share.
Fisker does not its manufacturing plants. It’s operated by Magna International. And I bring that up because so much of Fisker and the direction that we have seen with the stock is a result of production and demand and delivery numbers. And the fact that they don’t control that could kind of keep them a bit rangebound here, at least in the short term.
BRAD SMITH: Yeah, absolutely. I mean, look, the company has a lot of great names for their vehicles, the ocean. You’ve got the Alaska. You’ve got the pair, the Ronin. I mean, that’s all great and dandy. But at the end of the day here, this is a company that had gone public via SPAC. It’s seen itself just trim all of those and decline into a lot of obscurity that we’ve seen here at this point in time. There’s a larger question or at least there was about whether or not it would be delisted at some point.
Well, fortunately, at this point in time, it seems like the financials that have come forward start to clarify that a little bit more and what they’re actually expecting going forward. But then, at the end of the day too, you’ve got to think about where we’ve seen for the electric vehicle landscape, some of the largest manufacturers also pull back on their own, not just development but their production and their delivery kind of timelines and their milestones. Ford was one of them that recently had come about.
And that is the demand environment right now. When you’ve got it being such an expensive purchase for so many and a financed purchase, the credit conditions right now don’t really set up for a purchase like this.
And then, additionally, you’re still waiting for much of the network for charging to come online too. And so that’s where it seems like a little bit more of an antsy environment for some of the potential buyers sitting on the sidelines of this as at this point in time and impacting some of the timelines for major automobile manufacturers and then Fisker as well here.
Also, we got to talk about Chinese electric car maker BYD. I was tracking this one this morning. It said it launched its flagship sedan in the United Arab Emirates this week. It’s not immediately clear when the deliveries will begin. But BYD is the market leader in China. That’s worth noting.
It delivered over 151,000 fully electric vehicles in September alone. It also recently crossed the threshold of 6 million new energy vehicles rolled off the production line. That’s at their Zhengzhou factory.
And so they said that this momentous occasion, record-breaking achievement underscoring the unwavering commitment to pioneering advancements in the electric vehicle industry. And it’s probably something that they’re saying because, well, one day they hope it’s extremely profitable for them long term.
SEANA SMITH: They do hope it’s extremely profitable for them long term, a lot of this obviously also hinging on demand and exactly what that looks like. When you mention BYD, there was also a report out today that’s putting some pressure on Tesla this morning. But this is tied to price cuts here, potential reports here that the carmaker is planning to offer steeper price cuts for their dynasty models as they do look to boost some demand for their own EV vehicles.
And obviously, this would just extend the price war that we have seen play out in China and really across the world when it comes to making EVs a bit more affordable, a bit more competitive in order to really propel that mainstream adoption that we’ve been waiting for now for quite some time.
BRAD SMITH: Yeah, these price wars have been remarkable to track, especially region by region, Tesla and Elon Musk, and the initiation of much of that but still at a time where consumers in both of those regions are trying to figure out, OK, what is actually a good price? And many of them actually may be doing so much work to cut price just to get people into that ecosystem and perhaps get them into a trade in, trade up type of relationship over that longer customer lifetime value.