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Swerve to Avoid These 2 Electric Vehicle Stocks That are Plummeting

Published 12/02/2021, 02:21 PM
Updated 12/02/2021, 03:30 PM
© Reuters.  Swerve to Avoid These 2 Electric Vehicle Stocks That are Plummeting

© Reuters. Swerve to Avoid These 2 Electric Vehicle Stocks That are Plummeting

Even though the electric vehicle industry is expected to grow exponentially in the long run, the recent bull run has led to unsustainable gains in many EV stocks. So, it could be wise to avoid fundamentally weak EV stocks like Arrival (ARVL) and Faraday Future (FFIE).The electric vehicle (EV) industry is expected to grow manifold in the long run, thanks to the growing climate change concerns, favorable government policies, and technological advancements in batteries. However, the recently-identified omicron coronavirus variant could aggravate the semiconductor chip shortage, hampering the EV industry’s progress.

According to Makoto Uchida, the CEO of Nissan Motor Co., Ltd. (OTC:NSANY), “We have a semiconductor shortage as an industry and how we recover from that is critical.” Moreover, sky-rocketing production expenditures with regards to EVs pose a threat for several companies. Stellantis N.V. (STLA) CEO Carlos Tavares said on December 1 that the costs are "beyond the limits" of what the auto industry can sustain.

Given this backdrop, it could be wise to avoid EV stocks Arrival (ARVL) and Faraday Future Intelligent Electric Inc. (FFIE). They have lost more than 25% over the past month, and their growth prospects look bleak.

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