2021 marked a great run for the stock market, with the benchmark S&P 500 index returning almost 27%, while the Dow Jones Industrial Average and the Nasdaq Composite returned 18.7% and 21.4%, respectively. Prices of numerous stocks also soared to a record high last year. However, many companies are trading at very rich valuations solely due to bullish investor sentiment and are not backed by their fundamentals.
Investors’ interest in electric vehicle stocks has been growing due to growing climate change concerns and favorable government policies. According to a Research and Markets report, EVs are expected to represent 48% of all new cars sold in 2030. However, several start-ups are leveraging the optimistic market sentiment to boost their stock prices instead of focusing on its fundamentals and growth prospects. Several EV stocks surged in double digits last year, despite not launching any vehicles.
