(C) Reuters. Avoid These 3 Electric Vehicle Stocks in June
While electric vehicles (EVs) are expected to rule the automotive market in the long run, concerns over the formation of a price bubble after a skyrocketing rally by stocks in the sector last year and an ongoing semiconductor shortage make the industry’s near-term prospects look bleak. So, it’s wise, we think, to avoid fundamentally weak EV players Arrival Limited (ARVL), Blink Charging (BLNK), and Workhorse Group (WKHS) for now. Read on.The year 2020 saw unprecedented investor interest in the electric vehicle (EV) industry as governments worldwide announced several initiatives to address climate change concerns. The overall prospects of the global EV market look promising, with massive opportunities for growth in the battery, hybrid, and plug-in-hybrid fields. Indeed, according to a Meticulous Research report, the EV market is expected to grow at a 33.6% CAGR over the next six years.
However, the production costs for EVs are increasing in-part because of a global semiconductor chip shortage. This, along with the industry’s overvaluation, is dampening investor interest in the EV space. This is evidenced by the Krane Shares Electric Vehicles and Future Mobility Index ETF’s (KARS) 1.3% loss over the past three months versus the SPDR S&P 500 Trust ETF’s (SPY) 10.4% gains over the same period.
There is also intense competition in the EV industry, with several new entrants vying for market share. Given this backdrop, we think it’s wise to stay away from Arrival Limited (ARVL), Blink Charging Co. (NASDAQ:BLNK), and Workhorse Group Inc. (WKHS) because their near-term prospects look bleak.
Avoid These 3 Electric Vehicle Stocks in June
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.