2 Sell-Rated Electric Vehicle Stocks To Avoid In January


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The EV industry’s accelerating growth has helped most companies in the sector gain significantly over the past year. But many start-ups have been boasting triple-digit gains driven purely by market sentiment in the absence of convincing product pipelines or favorable financials. Workhorse Group (WKHS) and Electrameccanica Vehicles (SOLO) are two such stocks that are best avoided now, we believe, because they have yet to turn a profit.

Rising concerns regarding climate change, increasing support from governments and international agencies, and favorable market sentiment are some of the reasons contributing to the electric vehicle (EV)  industry boom. While many companies are capitalizing on this trend to pump up their sales numbers, many start-ups are surging purely on investor optimism, leading to an EV bubble. If left unchecked, this speculation could lead to a Dotcom Bubble 2.0.

While Nikola Corporation’s (NKLA) conspicuous market debut and triple-digit gains first brought attention to a potential EV bubble, it did not stop there. Companies such as Workhorse Group Inc. (WKHS - Get Rating) and Electrameccanica Vehicles Corp (SOLO - Get Rating) have rallied in triple-digits over the past year, without adequate sales or earnings to back up the price gains. In fact, both companies have yet to generate profits.

While the EV market boom might make these stocks look appealing based on their perceived growth potential, we believe it  is advisable to wait for these companies to launch their products commercially and turn a profit before investing in them. .

Workhorse Group Inc. (WKHS - Get Rating)

WKHS produces high performance electric vehicles for commercial and utility transportation across the U.S. It also designs unmanned aerial vehicles  purpose built for interstate package delivery. The company is an original equipment manufacturer of commercial medium-duty trucks.

While WKHS has received multiple purchase orders from different businesses over the last year, it has  yet to launch its vehicles in the market. The company has not even unveiled its electric vehicles so far, for which it is currently in the initial manufacturing stages. Moreover, the company has lowered its production guidance of 300-400 vehicles for the fourth quarter ended December 31, 2020, citing COVID-related supply chain disruptions.

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Dick Kaplan 2 weeks ago Member's comment

#Workhorse $WKHS has been making electric delivery vans for a decade. Customers have hundreds of them. Their customers (UPS, DHL, etc) have over 8.5 million miles on workhorse electric delivery vans.

Pritchard just received several of the new C-Series last quarter. Liked them so much that they ordered 500 more. IKEA has received several this quarter.

You have been able to rent Workhorse C-1000 Zero Emission Electric Delivery vans from Ryder for 6 months and try them yourself. They tell me that they are rented constantly. They have a special website just for renting Workhorse C-1000 Electric Vans.