Stocks to sell

3 EV Stocks That Even the Rivian-Volkswagen Deal Can’t Save

Yesterday, a prominent automaker provided a much-needed catalyst for electric vehicle (EV) stocks. In an update that surprised most of the automotive community, Volkswagen (OTCMKTS:VWAGY) announced that it would be investing up to $5 billion in Rivian (NASDAQ:RIVN) over time, and the entire sector took notice. Many EV stocks enjoyed a boost as Rivian shares surged significantly. It isn’t hard to see why this could be a turning point for the EV startup. As The New York Times reports:

“If successful, the partnership would address weaknesses at both companies. It would provide Volkswagen with the software expertise that auto analysts say it sorely lacks. And Rivian, in addition to cash, would benefit from the manufacturing expertise of an automaker that produces nearly 10 million vehicles a year, putting it just behind Toyota Motor in the global auto industry.”

After struggling for months, Rivian finally seems poised to reclaim its former place as a leader among EV stocks and a rival for Tesla (NASDAQ:TSLA). Many EV stocks are still in the green today as the Rivian rally continues. But this sector-wide momentum doesn’t mean that all EV stocks are good buys. There are a few names that investors should still avoid, regardless of how well they are currently trading. Here are a few companies with particularly troubling fundamentals.

EV Stocks to Sell: Fisker (FSRNQ)

new grey electric Fisker Ocean in showroom, Dual Motor AWD, trends EV Europe, technological advancements automotive industry, environmental cleanliness vehicle. Fisker stock

Source: Kittyfly / Shutterstock.com

This troubled EV stock has been taking investors on a rollercoaster ride since it lost its spot on the New York Stock Exchange. News of dealership partners has spiked random surges for Fisker (OTCMKTS:FSRNQ) but never for long enough for it to matter. Earlier this month, the company defaulted on a $3.5 million loan and, a few weeks later, promptly filed for Chapter 11 bankruptcy. Now, Fisker is on the fast track to liquidation with virtually no chance of a saving grace coming along.

Fisker stock briefly rose yesterday on the back of the Rivian rally, and today, it is back in the green. But its gains of almost 20% for the week are far outweighed by the fact it has fallen more than 70% in just the past month. Even contrarian investors can’t make a case for why anyone should own Fisker stock as the company’s path continues to push it closer to the edge of a cliff.

Faraday Future Intelligent Electric (FFIE)

In this photo illustration, the Faraday Future logo is displayed on a smartphone screen. FFIR stock

Source: rafapress / Shutterstock.com

Like Fisker, Faraday Future (NASDAQ:FFIE) is prone to random surges that never last. It captured the attention of Wall Street last month when the Roaring Kitty rally sent meme stocks soaring. FFIE displayed more stability than popular r/WallStreetBets favorites such as GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC). But after the dust settled, all meme stocks ended up back where they belong, and Faraday Future is no exception. This rally won’t be any different.

FFIE stock surged by impressive margins yesterday, and it is still in the green today. But its current trajectory suggests that this momentum is already running out. The company doesn’t boast any real growth prospects. InvestorPlace contributor Omor Ibne Ehsan recently discussed the many reasons not to bet on Faraday’s Future. After highlighting its poor delivery track record, he stated:

“Faraday Future’s financials paint an even bleaker picture. The company racked up a staggering $1.5 billion in net losses over the past three years while burning through cash at an alarming rate. As of now, Faraday has less than $2 million in cash remaining, which is barely enough to keep the lights on, let alone scale vehicle production.”

EV Stocks to Sell: Canoo (GOEV)

Canoo (GOEV) logo displayed on smartphone screen as well as in background on yellow wall

Source: shutterstock.com/rafapress

This struggling EV penny stock couldn’t even sustain its momentum into today’s trading. Canoo (NASDAQ:GOEV) has spent the past year careening downward to truly dangerous levels. It is down more than 80% year-to-date (YTD), falling from a peak of more than $16 per share to its current price of less than $2. Things looked bleak enough before the company reported poor first-quarter earnings, coming in below analysts’ estimates for earnings-per-share (EPS) and not providing any revenue statistics.

Unlike the other two EV stocks to sell, GOEV isn’t rising steadily today. It initially fell this morning, and although shares have inched back into the green, trading has been volatile. This suggests that the company will continue its trek towards the bottom. The company has dwindling cash supplies, and with no catalysts on the horizon, it is unlikely to see any real growth in the coming months.

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Read More: Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Samuel O’Brient did not have (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.

Samuel O’Brient is a Reporter for InvestorPlace, where his work focuses primarily on financial markets, global economic trends, and public policy. O’Brient writes a weekly column on recent political news that investors should be following.

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