Morgan Stanley lowered its rating on electric vehicle maker Fisker (NYSE:FSR) to Underweight from Equal Weight on Wednesday.

Analyst Adam Jonas and team said they love the Fisker model design, but question if the company can fund the ramp of production at scale.

Jonas and team kept FY23 and FY24 revenue estimates remain unchanged, but now expect the back half of the decade to see lower revenues as the EV adoption curve is pushed out to the right.

“While we like the FSR story and strategy (design, engineering, and supply chain and their relationship with Tier 1 supplier Magna-Steyr), FSR’s need for capital, an unfavorable re-balancing of supply and demand in the EV space (where even Tesla, the current market leader, has announced sharp and unprecedented price cuts globally), and a potentially crowded EV market during a time of ongoing deterioration in the macro environment drives us to downgrade the stock to UW.”

Morgan Stanley assigned a price target of $4 to Fisker (FSR), which is 2.6X the 2030 EBITDA estimate, 4.9X 2030 earnings, and 0.2X 2030 sales. A bull case PT of $15 and bear case PT of $1 from Morgan Stanley are also part of the matrix.

Shares of Fisker (FSR) fell 6.99% premarket to $6.79 vs. the 52-week trading range of $6.41 to $14.74.

Electric vehicle sector watch: Read the Tesla earnings preview.