A raft of EV stocks emerged at the start of this decade as investors hunted for the next Tesla. After electrifying debuts, several EV startups now languish as penny stocks.
In a sense, Nikola, Fisker and Lucid amount to a cautionary tale about stock investment hype, highlighting execution risk for young companies, especially in the capital intensive business of making electric vehicles.
On top of that, the once highflying startups took a hit this year from fears they could suffer most in a Tesla-led price war.
Tesla stock has sizzled in 2023 so far, though it slumped nearly 9% Thursday after missing earnings and revenue expectations for the third quarter late Wednesday. TSLA has now exited the IBD 50 list of top growth stocks, as well as the Leaderboard line up. As investors parsed through Tesla earnings to determine the read-through to other EV companies, many startup EV stocks wilted as well.
Startup EV Stocks: Nikola
Shares of Nikola crumbled more than 8% to 1.03 in Wednesday's stock market trading. Nikola stock shed a further 2.4% to 1.06 Thursday. The EV stock has plunged 32.5% in October so far and has lost more than half its value year to date.
In June 2020, Nikola came public via a deal with a special purpose acquisition company (SPAC) that valued the startup at more than $3 billion. Many investors expected it to become the "Tesla of trucking."
The EV stock hit a record high above $90 a share soon after the debut. It's been on an almost relentless slide ever since, reflecting a series of hits on its reputation. Nikola said in August that a recall of more than 200 electric semi-trucks, tied to a battery issue, could hurt deliveries this year.
Penny Stocks: Lucid
Shares of Lucid plunged more than 9% to 4.53 Wednesday. They retreated a further 4.2% to 4.34 Thursday. Lucid stock hit a new 52-week low intraday. It's down 22% month to date and has lost more than a third of its value year to date.
Lucid came public in July 2021 via a $24 billion mega-SPAC deal. The EV stock reached a high above 64 not long after. Tesla's U.S. luxury rival has crumbled since, despite a few short-lived rallies.
On Tuesday, Lucid revealed a nearly 30% drop in EV production during the third quarter. Its Q3 EV deliveries also underwhelmed, notwithstanding big discounts and cheaper models.
Fisker Stock
Shares of Fisker shed 3.5% to 5.92 Wednesday. Fisker stock skid a further 3.6% to 5.71 Thursday. Penny stocks are technically stocks that trade for under $5 a share. Fisker stock traded below that level for brief periods over the summer, though it is back up a bit since.
Fisker came public in October 2020 through a SPAC deal valuing it at $2.9 billion. Shares achieved a high near 32 a few months after.
Like a few other EV stocks, it has been on a steady decline since then. It's down 11% this month and has lost more than a fifth of its value year to date.
Fisker is a highly shorted stock. After delays, the company began delivering its first model, the Ocean SUV — a rival to Tesla's bestselling Model Y — in May. It's now taking the Ocean to the intensely competitive Chinese market, which has seen an EV price war this year.
Other once-hot EV stocks now trading in penny stock territory include Canoo, Workhorse, Faraday Future, Lion Electric and Xos.
