On Jan. 11, the National Highway Traffic Safety Administration’s (NHTSA) Office of Defects Investigation (ODI) announced that it would conduct a preliminary evaluation (PE) of the 2023 Fisker (NYSE:FSR) Ocean after it received nine complaints about the loss of the vehicle’s braking performance. One of the complaints allegedly involved a crash and injury. The Ocean’s braking system utilizes both friction and regenerative braking.
“The complaints allege a partial loss of braking over low traction surfaces, without alerting the driver,” wrote the NHTSA. “This results in a sudden increase in stopping distance.” This is the agency’s first investigation into the vehicle.
This morning, Fisker issued a press release stating that it would fully cooperate with the PE.
FSR Stock: Fisker Issues Response to 2023 Ocean Brakes Preliminary Evaluation
The electric vehicle (EV) company also added that it pushed out an over-the-air (OTA) update in December to fix regenerative braking issues when driving over bumps and uneven surfaces. “The Fisker Ocean brake system meets or exceeds all US and international performance requirements,” said the company.
Still, shares of FSR stock have fallen below the pivotal $1 price level in recent days. FSR stock closed below $1 on Jan. 16 and has since remained there. That could be problematic.
Nasdaq policies note that a company will receive a deficiency notice if its stock closes below $1 for 30 consecutive trading days. Afterwards, the company will be provided with a 180-day compliance period for its shares to close at or above $1 for at least 10 consecutive trading days. If a stock is unable to achieve this, the company may be provided another 180-day compliance period. A stock runs the risk of being delisted if it is unable to close at $1 for at least 10 consecutive trading days by the end of the second compliance period, although it may be eligible for a Hearings Process.
Meanwhile, analysts don’t seem too upbeat on Fisker. CFRA upgraded FSR stock to “hold” from “sell” yesterday, although it lowered its price target to 75 cents from $1. On Wednesday, TD Cowen also downgraded FSR to “market perform” from “outperform” while lowering its price target to $1 from $11.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
