Are we reaching a “buy the dip” moment for Hyliion (NYSE:HYLN)? Not so fast. Sure, after tumbling massively in recent weeks, we may be reaching a bottom in Hyliion stock.

But, shares offer exposure to the EV megatrend, there’s no guarantee this particular play is going to crush it in the coming years.

Why? While the company has highlighted its potential to grow into a multi-billion dollar business in a matter of years, it’s yet to prove itself. It’ll be a year until its flagship Hypertruck ERX starting rolling off the assembly line.

Also, while its EV offering is a battery-powered vehicle, it uses renewable natural gas as a battery generation fuel source.

Sure, “renewable natural gas” may be more eco-friendly than regular natural gas. But, using this fuel source means its vehicle isn’t exactly “zero-emissions.”

Given this factor could impact sales growth, it’s easy to see this aspiring EV player fall short of expectation.

With this in mind, shares may still be richly-priced, even after the recent decline. In short, good reason to stay on the sidelines for now.

Hyliion Stock and Its Big Selloff

As InvestorPlace Markets Analyst Thomas Yeung discussed this is just one of many EV stocks that have gone public by merging with a SPAC, or blank-check company.

In the case of Hyliion, the formerly privately-held company went public earlier this month, via its merger with SPAC Tortoise Acquisition.

In the months before the Tortoise deal closed, shares went parabolic, rallying from their $10 per share offering price, hitting prices topping $59 per share). After that, shared dipped a bit, with the stock closing at $44.91 per share the day the deal closed (Oct 1).

But, after that, it turned into a “falling knife” scenario for the newly-named Hyliion stock. Some investors may have seen the double-digit daily declines as opportunities to “buy the dip.” But sadly, they were mistaken. By month’s end, shares had fallen more than 50%.

What was behind this epic mover lower in a matter of weeks? To some extent, the overall sell-off in EV SPAC stocks played a role in the share price decline.

Rivals like Nikola (NASDAQ:NKLA) and Workhorse (NASDAQ:WKHS) saw double-digit declines as well during the month. But, their respective declines pale in comparison to the rapid drop in Hyliion shares.

So, what may be the larger driver here?

Investors may be starting to doubt the “story” behind this once high-flying “story stock.” And, with one Wall Street analyst pointing out a major factor that could impact this company’s ambitious growth projections, it’s possible we haven’t seen shares bottom out just yet.

Natural Gas Reliance May Hinder Sales Growth

What’s the “story” behind Hyliion? As our own Alex Siriois Oct 29, the company is currently selling a retrofit solution for existing class 8 diesel trucks. But, what’s really going to move the needle for this company is sales of its Hypertruck ERX.

Like with its EV truck rivals, production hasn’t started yet. However, vehicles will start coming off the assembly line a year from now. And based on the company’s projections, sales could top $2 billion by 2023.

Yet, doesn’t every early-stage EV name have the same prediction? That they are going to go from zero to hero by the mid-2020s, justifying current sky-high valuations?

There no denying that, with this industry accelerating, one of the EV SPAC stocks will become the next Tesla (NASDAQ:TSLA).

But, based on a recent Wall Street research note, I’m doubtful this “aspiring Tesla” is the leading contender.

What am I talking about? In mid-October, JP Morgan’s Paul Coster initiated coverage on Hyliion stock, giving shares a “hold rating.”

The analyst’s rationale? Coster sees a risk in the company’s use of natural gas. Simply put, Hyliion’s platform uses a generator fueled by renewable natural gas to extend the range of its battery.

In Coster’s view, “the reliance on natural gas could backfire.” While the company and its natural gas partner tout this fuel source as having “net negative carbon emissions,” it’s not exactly a “zero-emissions” vehicle.

This could mean the company fails to live up to its ambitious growth projections. And, with shares still richly priced (even after last month’s declines), there’s plenty of room for shares to head lower.

Still a ‘Wait and See’ Situation

Granted, while shares have taken a bath in recent weeks, a near-term pop isn’t out of the question. The EV megatrend isn’t going away anytime soon. And, while “EV mania” has cooled recent weeks, we could see a repeat of the wild speculation we saw earlier this year.

Yet, this alone doesn’t make Hyliion stock a screaming buy, even at today’s discounted prices. With the company still needing to prove itself, steer clear of this “also ran” EV play for now.

On the date of publication, Thomas Niel did not (either directly or indirectly) hold any positions in the securities mentioned in this article.

Thomas Niel, a contributor to InvestorPlace, has written single stock analysis since 2016.