Despite the substantial support being lent to the Electric Vehicle (EV) industry by governments worldwide, it still faces challenges, such as the current, global semiconductor chip shortage, among others. Given this environment, we think fundamentally weak EV manufacturing stocks Faraday Future (FFIE),The Lion Electric Company (LEV), and Lightning eMotors (ZEV) are best avoided now. Read on for an explanation.The governments of several countries have announced ambitious plans to phase out internal-combustion vehicles in favor of electric vehicles (EVs) to achieve carbon neutrality over the next few decades. For example, the Biden administration has allocated $7.50 billion for EV charging stations under a $1 trillion bipartisan infrastructure bill. In addition, 29 Senate Democrats are currently seeking $160 billion in additional funding for EVs.
However, the EV industry faces several obstacles, such as production and supply chain bottlenecks due to an ongoing semiconductor chip shortage. Furthermore, given this industry’s increasing popularity, several start-ups have entered the sector absent an adequate product pipeline or technological capabilities. These stocks have been advancing in price based solely on industry tailwinds and aggressive marketing.
Thus, we believe fundamentally weak EV manufacturing stocks Faraday Future Intelligent Electric Inc. (FFIE), The Lion Electric Company (LEV), and Lightning eMotors, Inc. (ZEV) are best avoided now.