Why Freyr stock popped on Tuesday even as Fisker and Li Auto fell

Tuesday was a mixed day in the electric vehicle market, with stock prices of electric vehicle (EV) startup car manufacturers. fisker (FSR -6.00%) Down 7.7% as of 2:10 PM ET, Chinese rival Rioto (lee -8.03%) While it fell 8.3%, lithium battery companies Frey Battery (Fray 2.67%) It moves in the opposite direction — up 3.5%.

Company updates on important developments appear to be driving each move.

Electric vehicle sales soar

Let’s start with electric vehicle manufacturers. On Friday, just before the New Year holiday, Fisker confirmed its final EV numbers for 2023. 10,142 Fisker Ocean electric SUVs were produced, but less than half of them – 4,700 – were delivered to customers.

Fisker CEO Henrik Fisker welcomed the achievement, noting that Fisker finally became a “revenue-generating company” in 2023, and characterizing the money coming in as “substantial.” That sounds like good news. But how practical is “substantial”?

Executives said most of the cars delivered last year were Fisker Ocean Ones, which sold for $69,000 each, meaning the company could have generated as much as $324 million in revenue last year. That’s roughly half of the company’s market capitalization, giving Fisker a price-to-sales ratio of about 1.8. Compared to teslaA P/S ratio of 9 would seem to suggest that Fisker stock is cheap. But it’s important to remember that Tesla’s earnings are profitable. Fisker isn’t there yet. At last report, the company was still losing $468.5 million per year, or about $1.60 for every dollar of revenue, which probably explains the large difference in valuation.

Next is Li Auto.

Li reported the figures on Sunday. The company met its December sales target, delivering 353 more EVs than its 50,000 target, representing a 137% year-over-year growth rate. Nonetheless, this represents a slowdown in growth compared to the fourth quarter (131,805 deliveries, up 185%) and the full year (376,030 deliveries, up 182%).

Li also noted that it is currently “the best-selling premium car brand in the SUV market” in China.

In terms of valuation, Li’s price is about twice that of Fisker, or 3.6 times annual sales. But unlike Fisker and Tesla, Li is a highly profitable operation, earning $6.3 billion in net profit over the past 12 months. Investors may also be concerned about a slowdown in sales growth in December. But considering that Li appears to be a much better company than Fisker, I don’t believe its stock deserves to be punished as severely as Fisker is being punished today.

One of these is not like the other.

Speaking of impunity stocks, Freyr stands out as an EV stock with a healthy shade of green in today’s mostly red-painted EV sector. But does the news justify a rise in the stock price?

Unlike Tesla, Li, or even Fisker, Freyr remains an unprofitable (much less profitable) company. And the biggest news about the company today isn’t that its profits are growing, or even that it has become a “profit-making company.” Rather, Freyr announced today that he has moved back to the United States from Luxembourg.

Management argues that the move is good for the company and its stock because it simplifies Freyr’s corporate structure, streamlines financial reporting and makes it easier to buy into exchange-traded funds (ETFs) focused on lithium and lithium batteries. Frey’s stock that could increase its stock price. none of this actually business But it’s better.

On the other hand, Frey pointed out that moving to the United States may be advantageous in taking advantage of U.S. government subsidies currently being paid to electric vehicle battery manufacturers. I think this is what makes Freyr one of the most interesting investors today. This is because it is the factor most likely to translate into dollars and cents when it comes to a company’s revenue.

And fingers crossed that Frey could really use some help.