Fisker (FSR) - Get Fisker Inc. Class A Report and Lordstown Motors (RIDE) - Get Lordstown Motors Corp. Report both tumbled Thursday after Goldman Sachs downgraded shares of both electric vehicle makers over concerns about an increasingly competitive EV market.
Fisker shares were falling 10.5% to $13.56 on Thursday, while Lordstown fell nearly 4% to $9.38.
Analyst Mark Delaney said in a research note he was downgrading Fisker to sell from neutral and cutting his price target to $10 from $15.
"While we appreciate the steps that the company is taking to try to differentiate its upcoming products (such as the ADAS system, longer-range on the Ocean, solar roof, and use of recycled materials)," Delaney said, "we are incrementally concerned about what we believe is the company’s late time to market (the company is planning to enter the industry starting in 4Q22 with its Ocean SUV) as competition increases."
The analyst said Fisker also "announced a plan for a unique follow-on vehicle with Foxconn that could enter the market around 4Q23, but by the time this vehicle may be ramping, the competitive landscape could be even more challenging."
On Tuesday, analysts at Bank of America initiated coverage of Fisker with a buy rating and $31 price target.
Delaney cut Lordstown Motors rating to neutral from buy, while cutting his price target to $10 from $21.
Lordstown Motors suffered a setback Monday after its pickup truck, Endurance, failed to complete a race in Baja, Mexico.
The analyst said the recent issues with the Baja race "suggests to us that there could be more development work to do on the powertrain than we had expected."
"This factor, coupled with the global auto supply chain challenges that are making it difficult to obtain parts," Delany said, "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."
Finally, he added, "Lordstown Motors will also be subject to the increasing industry competition, including in pickup trucks."
Last month, Lordstown Motors was the target of a negative report from investment firm Hindenburg Research, which charged the company "misled investors on both its demand and production capabilities."
In response, the company said it remained on track for start of production of its Lordstown Endurance all-electric pickup truck in September 2021.