The demand for electric vehicles (EVs) has been overwhelming. Sales of electric cars doubled last year to a new record of 6.6 million, while the number of electric cars on roads globally by the end of 2021 tripled the amount in 2018.
However, inadequate charging infrastructure remains a major headwind in EV adoption. Customer satisfaction with public Level 2 charging fell to 633 from 643 in 2021. Brent Gruber, executive director of global automotive at J.D. Power, said, "Public charging continues to provide challenges to overall EV adoption and current EV owners alike."
Moreover, logistic disruptions related to the semiconductor chip industry continue to hinder optimal productivity of the EV sector. Bosch Limited's CEO Stefan Hartung said, "A lot will ease up in 2022, but there will still be bottlenecks in 2023."
Therefore, fundamentally weak EV stocks Lucid Group, Inc. (LCID), Nikola Corporation (NKLA), Canoo Inc. (GOEV), Workhorse Group Inc. (WKHS), and Mullen Automotive Inc. (MULN) might be best avoided this year.
Lucid Group, Inc. (LCID)
Technology and automotive company LCID develops electric vehicle (EV) technologies. The company creates electric vehicles, EV powertrains, and battery systems.
LCID's total cost and expenses came in at $656.54 million for the second quarter ended June 30, 2022, up 163.6% year-over-year. Its loss from operations came in at $559.20 million, up 124.7% year-over-year. Moreover, the company's adjusted EBITDA came in at $414.10 million, down 89.9% year-over-year.
Analysts expect LCID's EPS to decrease 52.4% year-over-year to a negative $0.32 for the quarter ending September 2022. Over the past nine months, the stock has lost 56.1% to close the last trading session at $16.55.
LCID's poor fundamentals are reflected in its POWR Ratings. The stock has an overall F rating in our proprietary rating system, translating to Strong Sell. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
LCID has an F in Value, Quality, and Stability and a D in Sentiment. Within the D-rated Auto & Vehicle Manufacturers industry, it is ranked #55 out of 65 stocks. Click here to see the additional POWR Ratings for Momentum and Growth for LCID.
Nikola Corporation (NKLA)
NKLA is a technological inventor and integrator to create energy and transportation solutions. It works through two market segments: Truck and Energy.
NKLA's loss from operations came in at $172.23 million for the second quarter ended June 30, 2022, up 24.4% year-over-year. Its net loss came in at $173 million, up 20.8% year-over-year. In addition, its loss per share came in at $0.41, up 13.9% year-over-year.
Street expects NKLA's EPS to decrease 4.5% year-over-year to negative $1.81 in 2022. Over the past year, the stock has lost 44.2% to close the last trading session at $5.39.
NKLA's overall F rating equates to a Strong Sell in our POWR Ratings system. It has an F grade for Stability and Quality and a D grade for Value and Sentiment. It is ranked #57 in the Auto & Vehicle Manufacturers industry.
Beyond what is stated above, we've also rated NKLA for Momentum and Growth. Get all NKLA ratings here.
Canoo Inc. (GOEV)
GOEV, a mobility technology firm, designs, engineers, develops, and manufactures electric vehicles in the United States for commercial and consumer markets. The company provides lifestyle delivery cars, multi-purpose delivery vehicles, and pickups.
GOEV's loss from operations came in at $173.50 million for the second quarter ended June 30, 2022, up 66.3% year-over-year. Its net loss came in at $164.39 million, up 46.1% year-over-year, while its loss per share came in at $0.68, up 36% year-over-year.
GOEV's EPS is expected to decrease 60% year-over-year to negative $0.56 for the quarter ending September 2022. Also, it missed EPS estimates in three out of four trailing quarters. Over the past year, the stock has lost 60.5% to close the last trading session at $2.71.
GOEV's overall F rating equates to a Strong Sell in our POWR Ratings system. It has an F grade for Value, Stability, and Quality and a D grade for Growth and Sentiment.
GOEV is ranked last in the same industry. We have also rated GOEV for Momentum. Get all GOEV ratings here.
Workhorse Group Inc. (WKHS)
WKHS, a technology company, designs, manufactures and sells zero-emission commercial cars in the United States. Under the Workhorse brand, the company produces electric and range-extended medium-duty delivery trucks and the HorseFly Unmanned Aerial System, a custom-designed purpose-built all-electric drone system.
WKHS' sales came in at $12,555 for the second quarter ended June 30, 2022, down 99% year-over-year. Its total operating expenses came in at $18.06 million, up 97.8% year-over-year. Also, its total assets came in at $190.53 million for the period ended June 30, 2022, compared to $228.14 million for the period ended December 31, 2021.
WKHS' revenue is expected to decrease by 2,280.8% year-over-year to $18.58 million in 2022. Also, it missed EPS estimates in each of the trailing four quarters. Over the past year, the stock has lost 63.8% to close the last trading session at $3.16.
WKHS's overall F rating equates to a Strong Sell in our POWR Ratings system. It has an F grade for Value and Stability and a D for Sentiment and Quality. It is ranked #54 in the same industry.
Beyond what is stated above, we've also rated WKHS for Growth and Momentum. Get all WKHS ratings here.
Mullen Automotive Inc. (MULN)
MULN is an electric vehicle manufacturer and distributor. Additionally, it runs the digital platform CarHub, which uses AI to give a user-friendly way to buy, sell, and own a car. It sells battery technology and emergency point-of-care solutions.
On August 1, 2022, MULN launched a new Automotive Development Center in California. However, this new venture might not immediately yield optimal benefits for the company.
MULN's loss from operations came in at $18.22 million for the third quarter ended June 30, 2022, up 184.5% year-over-year. Its net loss came in at $59.47 million, up 289.9% year-over-year. In addition, its general and administrative expenses came in at $10.90 million, up 121.2% year-over-year.
Over the past year, the stock has lost 94% to close the last trading session at $0.58.
MULN overall F rating equates to a Strong Sell in our POWR Ratings system. The stock has an F grade for Value and Stability and a D for Sentiment and Quality. MULN is ranked #56 in the Auto & Vehicle Manufacturers industry.
Click here to access the additional POWR Ratings for MULN (Growth and Momentum).
LCID shares were trading at $16.02 per share on Tuesday morning, down $0.53 (-3.20%). Year-to-date, LCID has declined -57.90%, versus a -15.60% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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