The EV Extinction Event: 3 Electric Vehicle Parks That Will Be Gone in 5 Years

A few years after electric cars seemed poised to dominate the auto industry, the stock market has taken a turn for the worse. Now, investing in electric car stocks is an exercise in pain tolerance.

Time of Tesla (NASDAQ:TSLA) recent earnings comments had the EV market bullish (of course it wasn’t company numbers, which were terrible), many other EV companies are struggling. Many high-potential but early-stage EV manufacturers are now forced to resort to heavy debt or equity issuance to survive. That means greater balance sheet pressure or dilution risks for investors.

With that in mind, the narrative among a certain group of electric car stocks is moving towards which will go bankrupt first. For those looking to take a business side of the industry, here are three stocks to consider right now.

Lucid Motors (LCID)

Despite trading below an all-time high, Lucid Motors (NASDAQ:LCID) will not face bankruptcy anytime soon. Expires 2023 and $4.78 billion in liquiditymany investors are confident that this cash pile will last at least 2025, when the company ramps up production of its Gravity SUV.

With a manageable debt-to-equity ratio of 0.43 and above 60% ownership and the Saudi Arabian government’s Public Investment Fund, Lucid has the opportunity to raise funds and support from a major shareholder.

Indeed, the Saudi investors backing Lucid have deep pockets and the company is putting a lot of money into bringing its high-end EVs to market. The thing is, sometimes, even the wealthiest investors can cut their losses, if they think the profit might take too long to be realized.

While Lucid’s valuation on a relative basis looks good, the question is whether revenue growth will increase faster than the market believes. Barring that, and unless the Saudis continue to get into this stock in a bigger way, it’s not an easy name for long-term investors to covet at current levels. LCID stock may have more room to decline from here.

Mullen Automotive (MULN)

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Another EV company is facing a big challenge Mullen Cars (NASDAQ:MULN) Mullen didn’t have a good time in the market last year. EV manufacturer reported nonsense 308.9 million dollars loss in one quarter, resulting from high non-monetary expenses. In other words, executives get paid and assets go down while investors lose money.

Mullen hanged three share division in 2023 to maintain it Nasdaq listed, but remains in stock territory, falling more than 99% in the past year. Although it aims to expand the product line and increase production in 2024, Mullen faces significant capital challenges, and only $88 million in cash and more than $226 million in cash. This has led to an increase in outstanding shares. Mullen’s uncertain record raises concerns about his future prospects.

Although recent efforts include a $170 million cost-cutting program and a shift to commercial EV production, MULN stock is one that remains a major short-term idea — going long this name is a great way to get a lot of hair. gray

fisherman (FSR)

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Fisker (OTCMKTS:FSRN) faces the possibility of bankruptcy unless the creditors give relief. The company has said it may not be able to meet its debt obligations, if it defaults Interest payments of 8.4 million dollars. Investment talks with a major carmaker failed, leading to restructuring and dwindling cash reserves, until 325.5 million dollars in 2023. The company’s headcount also fell from 1,135 in December to 710 by April, but the cash burn continues.

Earlier this week, the launch of EV he announced plans to reduce its workforce and activities, aiming to reduce its physical presence. In March, it is reduced price for its 2023 Ocean SUV models to increase sales and raise capital.

Earlier warning of ongoing risks, Fisker faces stiff competition and reduced consumer spending due to economic uncertainty. This ongoing warning should be taken seriously by all investors right now.

Fisker is fast approaching bankruptcy. Export production to Magna International (NYSE:MGA) has caused quality issues and third NHTSA safety investigation, resulting in over 40,000 cancellations. Listed from NYSE, Fisker shares are now trading over the counter, marking one of the sharpest declines in the EV industry. This is just stock investors should not gamble away their hard earned money.

At the date of publication, Chris MacDonald did not have (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, in accordance with InvestorPlace.com’s Publishing Guidelines.