3 Electric Vehicle Stocks To Avoid At All Costs In Q2

FSR – A price retreat by electric vehicle (EV) stocks delivered substantial losses to overvalued, speculative stocks last quarter. And given the rising costs of production and expected decline in oil prices, EV sales are projected to fall in the near term. Thus, we think speculative stocks in the sector, such as Fisker (FSR), Electrameccanica Vehicles (SOLO), and Green Power Motor (GP), are best avoided now.
 

: FSR | Fisker Inc. News, Ratings, and Charts

 

Share prices in the electric vehicle (EV) industry have been experiencing a sharp pullback since early 2021. Investors are rotating away from overvalued EV stocks to cyclical stocks to capitalize on the prospective economic recovery. This is evident in the S&P Kensho Electric Vehicles Index’s 3.5% returns year-to-date versus the benchmark S&P 500’s 10.8% gains over this period.

Also, because investors fear the formation of an EV bubble and believe that it could pop soon, they are adopting a fundamental approach to investing, looking for solid financials and growth potential rather than investing in stocks based solely on optimism about an industry’s growth prospects. Furthermore, a global semiconductor shortage has aggravated the sector’s situation, and most EV companies are downgrading their outlook for 2021 given skyrocketing production costs. Also, as oil prices stabilize, with OPEC gradually curbing its production cuts, consumers are expected to continue purchasing internal combustion vehicles, at least until Biden’s proposed $174 billion EV package becomes a reality.

Thus, the EV industry slowdown is expected to continue this quarter. Amid these developments, we think investors must avoid Fisker, Inc. (FSR), Electrameccanica Vehicles Corp. (SOLO), and Green Power Motor Company (GP), given their weak fundamentals and negative earnings growth potential.

Fisker, Inc. (FSR)

Founded by renowned luxury car designer Henrik Fisker, FSR made its stock market debut through a reverse merger in October 2020. The company went public through a SPAC with Apollo Global Management affiliated Spartan Acquisition Energy Corporation on October 30, making it one of the newest players in the electric vehicle market. The company has generated $1 billion in cash through the merger, including $500 million through common stock PIPE funding.

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Brad Combs 2 weeks ago Member's comment

The day after this was published SOLO goes up almost 8%. Guess the details were a bit off...like missing the that they have manufacturing partners & aren’t “solely” (pun intended) reliant on the new facility being built in Mesa, AZ.

Also a bit of a mischaracterization of ElectraMeccanica’s balance sheet as “poor fundamentals” since they have ZERO debt.

Pretty smart if you ask me

The article is just an example of not that great journalism....if the entire section on ElectraMeccanica was removed it'd be more professional.

Andrew Armstrong 2 weeks ago Member's comment

Agreed. Most of the contributors here are great, but StockNews just isn't very good. At least not this particular writer of theirs. She doesn't do enough due diligence and often gets facts wrong. I wonder if their CEO, Steve Reitmeister realizes this.

Bruce Powers 2 weeks ago Member's comment

The author is probably short the stock.

Barry Glassman 2 weeks ago Member's comment

Unfortunately, Ms. Ganguly is probably the worst writer over at StockNews. She does very shotty research and too often just plain gets her facts wrong.

Salena Martin 2 weeks ago Member's comment

Fisker maybe doesn't make cars. But, they will sell them.