SPECIAL REPORT The Top 7 Stocks for 2024

3 EV Stocks That Don’t Have a Chance of Making It Out on Top


  • The future graveyard of EV manufacturers will include these firms.
  • Electrameccanica Vehicles (SOLO): The SOLO recalls were the beginning of the end. 
  • Mullen Automotive (MULN): Mullen’s reverse stock split intentions are a massive red flag. 
  • Faraday Future Intelligent Electric (FFIE): FFIE shows potential MULN investors what reverse splits do to share prices. 
EV Stocks to Sell - 3 EV Stocks That Don’t Have a Chance of Making It Out on Top

Source: Intarapong / Shutterstock.com

The EV landscape continues to take shape. That’s great for leading sector stocks like Tesla (NASDAQ:TSLA) that benefit from strong market share, growing sales, and established brand power. 

At the same time, as the market begins to solidify, early aspirants are beginning to fade fast. The field of EV manufacturers is quickly separating the wheat from the chaff. 

For every Tesla, there are dozens of manufacturers destined for the EV dustbin. Not only do these firms have zero chance of making it out on top, they probably have zero chance of even surviving much longer. If you hold these shares, let them go. If you were considering buying them, think twice. 


Electrameccanica Vehicles (SOLO)

ElectraMeccanica (SOLO) logo close up on website page, Illustrative Editorial
Source: Postmodern Studio / Shutterstock.com

I’d like to point out a few glaring issues with Electrameccanica Vehicles (NASDAQ:SOLO). My hope is that in doing so, I’ll prevent anyone from investing in it because I strongly believe that it is destined to fail. 

Let’s rewind to April and start with Electrameccanica Vehicles’ recall of its SOLO G3 and G2 vehicles. The firm voluntarily recalled 429 of its year 2019 and 2021-2023 vehicles due to a safety issue. Those vehicles were losing propulsion suddenly which posed a serious safety hazard. The company’s solution was to buy back those vehicles for the full purchase price including all taxes, fees, and shipping. That’s a strong business move that may have won it some fans but ultimately a big failure. 

Fast forward a few months and Electrameccanica Vehicles’ revenues fell by a factor of 15 to $100k. Losses narrowed to $12.9 million, hardly a win. More recently, the firm terminated a previously announced merger with Tevva that simply arouses more suspicion that Electrameccanica can’t do much correctly, due diligence included. 


Mullen Automotive (MULN) 

An angled shot of the Mullen (MULN) Five on display with a screen behind it.
Source: Ringo Chiu / Shutterstock.com

Mullen Automotive (NASDAQ:MULN) stock has no chance of making it to the top of the EV sector. It likely is going to fail completely. Even if it doesn’t, it’s going to cause more headaches than it’s worth. 

The company just filed a proxy statement on Oct. 19 indicating it intends to enact a reverse stock split. When companies enact reverse stock splits, the intent is to raise share prices by reducing the number of shares in circulation. Theoretically that makes each share thereafter more valuable. In practice, shareholders accurately recognize it as an act of desperation. It is one of the clearest signs in the market that a firm is in deep trouble. There’s no reason to ignore that sign this time around. 

Beyond that, Mullen Automotive is already fighting to keep its shares listed on the Nasdaq exchange. The company is communicating with a Nasdaq Hearings Panel in order to state the case that it deserves to remain listed on the major exchange. Mullen Automotive not only has no chance to win, it has little chance to survive. 


Faraday Future Intelligent Electric (FFIE) 

Person holding mobile phone with logo of electric vehicle company Faraday Future (FFIE) on screen in front of web page. Focus on phone display. Unmodified photo.
Source: T. Schneider / Shutterstock.com

Faraday Future Intelligent Electric (NASDAQ:FFIE) is a pre-revenue EV firm. The company and stock are simply far behind at this point. I’d argue that Faraday Future Intelligent Electric has no future. 

For now, the company is simply the promise of another large, powerful EV sedan slotted against Tesla S and Lucid Air sedans. The FF 91 looks like a low-slung minivan/sedan that accelerates much faster than ICE vehicles. That’s about it. Investors can look at designs and find hope in that but the proof is in the manufacturing and sales. Unfortunately, that’s where Faraday Future Intelligent Electric is a laggard. Lucid, Tesla, Fisker, and others are already far ahead in that regard because they are selling vehicles. 

FFIE stock has disappointed like few others in 2023. Although it rose from $21 to $86 by February, shares now trade for roughly $1. Certainly, some investors have been burned massively. It also enacted a reverse stock split, the results of which should further reinforce why MULN shares are even more dangerous at this point. 

On the date of publication, Alex Sirois 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.

Article printed from InvestorPlace Media, https://investorplace.com/2023/10/3-ev-stocks-that-dont-have-a-chance-of-making-it-out-on-top/.

©2024 InvestorPlace Media, LLC