Fisker stock fell 3.5% in premarket trading

Fisker stock fell 3.5% in premarket trading as its earnings revealed a large-than-expected Loss.

Fisker stock is falling after reporting disappointing third-quarter earnings. The earnings, however, don’t really matter. The company doesn’t have sales yet so investors should pay attention to milestones and Fisker hit a big one recently.

Fisker reported a 37 cents per-share loss on no sales Wednesday evening, while analysts were looking for a 34 cent loss. Earnings don’t tell us much, however. Fisker is still developing its all electric-SUV dubbed Ocean. Production is expected to start in November 2022, and Ocean reservations hit 18,600 as of Nov. 2, up from about 17,500 in early August.

“The critical sourcing phase for Fisker Ocean is now largely complete,” said CEO Henrik Fisker in the company’s news release. Just before earnings, his company announced a battery supply deal with China’s Contemporary Amperex Technology Co. Ltd (300750.China), which is better known as CATL. CATL is the world’s largest EV battery maker. The deal is for 5 gigawatt-hours of annual battery capacity, which is enough for roughly 50,000 EVs a year.

Fisker will use a cheaper lithium iron phosphate cathode battery for shorter-range vehicles and a lithium manganese cobalt cathode battery for its longer-range vehicles. Using different cathode chemistries is a common strategy for EV makers looking to optimize range, cost and materials availability.

Fisker stock has been volatile in 2021 as investors wait for production to start. Coming into Thursday, shares were up about 22% over the past three months. but the stock is down 43% from its March 52-week high of almost $32.