Stocks to sell

Electric Vehicle Nightmare: 3 Struggling EV Stocks to Exit Before It’s Too Late

While we can’t discount the long-term potential of the EV market, the sector has been battered from all sides in recent quarters. Waning demands, softening government support and a complicated macro environment have pushed the industry to an all-out “survival of the fittest” landscape. Continued losses, unmet delivery expectations and negative press are leading to an increasing number of struggling EV stocks

The following three companies were chosen based upon these criteria. Negative earnings or operating losses indicate companies struggling to achieve profitability. And negative news or scandals shows that companies’ future growth is hindered by high-impact exposures such as fraud and product issues.

It’s always wise to get ahead of a selloff. So, let’s look at some EV stocks you might want to cut out of your portfolio.

Nikola (NKLA)

Source: Dennis Diatel /

Market expectations notwithstanding, having one of your top officials charged with fraud is not a great look.

And so, circumstances became difficult with Nikola Corporation (NASDAQ:NKLA) when founder and ex-CEO Trevor Milton was sentenced to four years in prison for wire and securities fraud. While he has already been replaced, the incident’s ripple effect haunts the company. 

One can argue that Nikola has been taking extra steps to revamp its leadership team. But it’s still wading in murky waters. Nikola’s financials aren’t looking too hot, either. 

Nikola ended 2023 with $35.8 million in revenue. Unfortunately, it’s a tiny amount compared to the staggering $214 million loss recorded this year. This resulted in a negative 597% gross margin, a huge drop from 173% in fiscal year 2022. 

Not only that, Nikola still does not provide guidance. However, it did state that it’s “focused on optimizing revenue and costs in our business [for 2024], as we seek to scale hydrogen fuel cell electric truck production, secure additional modular refueling sites and deploy modular fuelers to support fleets and bring the battery-electric product back to the marketplace.”

That statement and adding two new board members with “deep experience in trucking and energy” are the only tangible things we have for the company’s road to recovery.

In addition, the company had to recall 209 electric semis due to battery flaws. With catastrophic financials and two delisting warnings in eight months, NKLA fits the “struggling EV stocks” category to a T. 

VinFast Auto (VFS)

Source: PhatTai /

VinFast Auto (NASDAQ:VFS) is a Vietnamese EV maker that exports electric SUVs, e-buses and e-scooters to the U.S. and Vietnam. 

It was one of the best-performing EV stocks in 2023, shooting up and over $90. However, it lost steam and plunged lower than its original $10 offering price. 

Some investors might look at VinFast Auto’s financials and see signs of a turnaround. Certainly, a 91% YO increase in revenue for fiscal year 2023 is a good sign, right? 

Not exactly. Increasing revenue should go hand in hand with increasing profitability or narrowing losses. However, VinFast Auto recorded a staggering $2.4 billion loss for the year, up 14.7% from 2022. 

Also, the company missed its delivery guidance. Its failure to achieve its own internal target has affected its profit margin. In a highly competitive EV market that revolves around very thin margins, it is quite clear that VinFast is one of the EV stocks struggling to build traction. 

With its current situation, it’s unknown whether investors would hold or simply run to the nearest exit when the next set of issues comes to light.

Rivian Automotive (RIVN)

Source: Tada Images /

Last but not least, we have Rivian Automotive (NASDAQ:RIVN), a company that was once one of the most promising players in the EV market food chain. Its Amazon partnerships propped up investors’ hopes on its potential. 

However, a single partnership does not make the company. RIVN shares took a nose dive after its underwhelming report in February 2024. It didn’t just miss targets.

It also laid off workers and lowered its guidance. These potential issues are firmly pointing to more trouble ahead.

If we look at Rivian Automotive’s numbers, it reported a whopping $5.7 billion operating loss in fiscal year 20’23. Meanwhile, net losses reached $5.4 billion. 

Even with enough cash under the mattress, keeping the company afloat with its current level of losses will be hard. In addition, the higher-for-longer interest rates, macroeconomic environment and waning demand for vehicles mean Rivian Automotive’s prospects of becoming profitable are grim.

With the worsening industry dynamics, I won’t be surprised if RIVN goes to penny stock territory if it fails to improve its financials. Hence, it’s one of the stocks I think any investor should be selling right now.

On the date of publication, Rick Orford 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 Publishing Guidelines.

Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.

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