Fisker (FSR) - Get Report shares soared on Friday after the electric carmaker said it has expanded its working relationship with Hon Hai Technology Group, better known as Foxconn, to continue building out its offerings of electric vehicles.
The deal includes building a new U.S. factory that will be able to support the projected start of production in the final quarter of 2023.
Fisker shares were up 6.02% at $10.56 at last check after the company said it has expanded a joint development and manufacturing deal related to the so-called Project PEAR – Fisker’s under-wraps efforts to produce a new type of electric vehicle.
Specifically, Fisker said it will work with Foxconn on a new lightweight platform called FP28. Under the partnership, both companies will jointly invest in Project PEAR, with each participant taking proceeds from the successful delivery of the program.
Fisker in February announced that it had signed a memorandum of understanding with Taipei-based Hon Hai Technology to work on Project PEAR, a new personal EV that it calls a “breakthrough electric vehicle.”
Under the arrangement, Foxconn will manufacture the vehicle at projected annual volumes of more than 250,000.
Production of the to-be-named personal vehicle will begin in the fourth quarter of 2023. Fisker said the vehicle, which may not necessarily look and operate like a traditional car, will retail for under $30,000 before incentives.
Morgan Stanley analyst Adam Jonas said in a research note that Fisker remains the broker’s top EV startup pick in the U.S. and its growth trajectory is tied to Foxconn’s ambition to become a major force in autonomous cars.
Jonas noted that Fisker's deal not only with Foxconn but with autonomous-car-tech maker Magna puts the carmaker onside with "... the Michael Jordan and Lebron James of contract manufacturing,” with both betting on Fisker to achieve their EV ambitions.
Project PEAR marks Fisker’s second formal foray into the mass-production EV market. The Los Angeles-based company is already ramping up to begin production on its first vehicle, the Ocean electric SUV, in the fourth quarter of 2022.
Fisker also said it will unveil a production-intended prototype of its Ocean SUV electric vehicle in late 2021. The company has collected more than 14,000 global paid reservations for the Ocean.