US EV startups make a profit; Nikola jumps on battery deal


Fisker (FSR) and Lucid (LCID) are preparing to report late Wednesday, kicking off a heavy slate of revenue from emerging US EV makers, battery players and charging companies. NKLA shares jumped Monday and earnings from the EV startup were expected early Thursday.


On Monday, Nikola (FSR) has announced it will acquire Romeo Power (RMO). Automakers have rushed to secure battery supplies for an expected surge from electric vehicles as prices of key battery materials have soared. RMO stocks shot from extremely low levels.

For these new EV stocks, production targets will be in the spotlight. This also applies to reservation and delivery numbers, as the headwind increases.

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A perfect storm has hit the global auto industry. The challenges include continued disruptions to the supply of chips and other products, rising inflation and fears of a recession in the US and the world.

That weighs on auto giants, let alone EV startups, like Fisker, that haven’t delivered a single electric car yet. But Fisker is nearing the launch of its first vehicle, the luxury Fisker Ocean SUV.

Fisker Earnings, FSR Stock

estimates: Analysts polled by FactSet expect Fisker to lose 41 cents a share, pushing losses higher than 16 cents a year ago. Fisker is a pre-income company.

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Results: Come back late Wednesday.

Outlook: For the full year, Wall Street sees Fisker lose $1.64 a share, 3 cents worse than in 2021.

Shares of Fisker fell 1.7% to 9.42 during Monday’s stock market action. FSR stocks continue to cross the 50-day moving average but are well below the 200-day line.

In the past year, the Fisker stock has lost 60% of its value.

On July 28, Fisker said it is on track to begin production of the Fisker Ocean electric SUV in November. Losses have skyrocketed as it prepares its first EV for production.

Fisker could inform investors about ties with contract manufacturing partner magna (MGA), the EV supply chain and Ocean Reservations.

The company reported 45,000 Ocean reservations in May and reportedly reached more than 50,000 Ocean reservations in June, after prices jumped 13% that month.

The Fisker Ocean sets itself apart by its price-versus-range specs. The most affordable version starts at less than $40,000 with an estimated range of 250 miles, but goes up to $70,000 for 350 miles.

Lucid Earnings, LCID Share

estimates: Analysts expect Lucid to cut losses sharply to 39 cents a share, from $1.17 a year earlier. They see nominal sales of less than $150 million, up from $57.7 million in the previous quarter. There is no sales from a year ago, FactSet shows.

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Results: Come back late Wednesday.

Outlook: For the full year, Wall Street sees Lucid lose $1.16 a share, significantly less than a $6.41 loss in 2021, which spans just three reported quarters.

Lucid shares gained 1.5% to 18.53 Monday, closing just below the 50-day moving average. LCID shares are 68% below a 52-week high.

Lucid has started supplying the Lucid Air Grand Touring, which will cost a whopping $154,000 for an official EPA-estimated range of 516 miles. A more affordable Pure model will launch in the fourth quarter.

On May 6, Lucid reported 30,000 Air EV reservations. But it only maintained a previously lowered target of producing 12,000-14,000 EVs by 2022.

Lucid warned that same day of “global supply chain and logistics challenges, including Covid-related factory closures in China”.

Nikola Earnings, NKLA Stock

Nikola reports early on Thursday. Check back later for Nikola estimates, results, and key milestones to review.

On Monday, Nikola announced the $144 million acquisition of Romeo Power in an all-stock transaction. Romeo Power designs and manufactures lithium-ion battery modules and packs.

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Nikola is Romeo’s largest production customer. “So the transaction vertically integrates operations by bringing battery and BMS engineering capabilities and manufacturing in-house,” RBC Capital Markets Joe Spak wrote in a note Monday.

But Spak expects higher costs associated with the Romeo Power acquisition and higher capital needs at Nikola, “which we had already forecast at more than $2.8 billion” through 2025.

NKLA shares rose 7.8% from very low levels to 6.71 on Monday. The Romeo Power share rose by 27% to 70 cents.

Both auto giants and EV startups are chasing Tesla (TSLA), the global EV leader. Tesla’s battery expertise and mastery of the EV supply chain help explain its advantage over a growing number of rivals.

Find Aparna Narayanan on Twitter at @IBD_Aparna.


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