In navigating the tumultuous electric vehicle (EV) market, consider EV stocks to sell in April. 2023 was a challenging year for the EV sector, plagued by waning demand, reduced government incentives and a complicated macro-environment. Though the potential for long-term growth remains for a few, the gloomy short-term outlook suggests a strategic portfolio adjustment might be more prudent. Moreover, with the shift from optimistic growth projections to a more grounded reality, 2024 could be another unattractive year.
In this regard, offloading certain EV stocks could shield you from the adverse impacts of the market’s current state. Having said that, let us look at three EV stocks ripe for selling.
Fisker (FSR)
Fisker (NYSE:FSR) was once celebrated as a top EV contender but now finds itself skidding into troubled waters. Operational chaos and financial missteps led to almost the entirety of its market cap being wiped out last year. It now trades for just 9 cents on the OTC market, with bankruptcy looming within the next few quarters.
During 2023, the company delivered just 4,929 of its flagship Ocean EVs out of the total 10,193 it produced it produced. Moreover, in its fourth-quarter (Q4) earnings call, it expressed doubts over its ability to continue as a going concern. Therefore, the firm is clearly in survival mode and slashed between 34% and 39% for its Ocean models to clear out its inventory.
Furthermore, a recent scathing TechCrunch alleged that the company mismanaged and temporarily misplaced millions in customer funds. Needless to say, that’s a lot for its investors to digest, whoever is left anyway.
NWTN (NWTN)
NWTN (NASDAQ:NWTN) is another fledgling EV startup that burst into the public markets in late 2022 through a SPAC merger with East Stone Acquisition.
To be fair, yje United Arab Emirates-based EV firm seemed promising, blending state-of-the-art design, self-driving capabilities and IoT technology. Moreover, its stock held up around $10 before experiencing a significant downturn, underscoring its struggles in kick-starting operations and securing its position in the fiercely competitive EV arena.
Furthermore, its most recent quarterly report paints a stark financial picture. It had modest sales of $0.6 million and negative earnings per share (EPS) of 24 cents. Moreover, with just $73.5 million in cash as of June last year, NWTN’s financial positioning is precarious. With NWTN navigating these turbulent waters, investors are left weighing the risks of betting on a lackluster startup struggling to demonstrate viability in the evolving EV space.
Nikola (NKLA)
Nikola (NASDAQ:NKLA) is another on the long list of troubled EV companies going public through SPAC mergers between 2020 and 2022. Following the conviction of its founder, Trevor Milton, for fraud, the EV upstart looked to right its course by hiring ex-GM executive Thomas Okray. However, despite his efforts to stabilize and revamp the leadership team, the path ahead remains incredibly challenging.
It ended last quarter producing just 35 hydrogen fuel cell electric trucks, posting modest sales of $11 million. Moreover, it had to recall its 209 electric semis due to severe battery flaws. That was compounded by a grim $154 million operating loss in the fourth quarter (Q4).
Furthermore, the firm’s financial distress is shown by its catastrophic full-year gross margin of negative 597% and dwindling sales from $49.72 million to $35.84 million. Net losses grew to $214 million. Additionally, a rapid cash burn, exceeding $150 million quarterly, casts a shadow over its sustainability.
On the date of publication, Muslim Farooque 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.