3 falling EV stocks to avoid right now

Despite strong demand, supply chain issues could affect the performance of the electric vehicle (EV) sector in the near term. Additionally, affordability remains a significant factor limiting adoption. Given near-term uncertainties, it may be best to avoid the fundamentally weak electric vehicle stocks NIO (NIO), Rivian Automotive (RIVN) and Mullen Automotive (MULN), which are down. Keep reading.

The demand for electric vehicles (EVs) is expected to increase significantly in the coming years. According to a new report from BloombergNEF, annual spending on electric passenger vehicles reached $388 billion in 2022, up 53% year-over-year. Additionally, the total value of electric vehicles sold to date in the passenger vehicle segment has now exceeded $1 trillion.

However, logistical hurdles remain a concern for the production of electric vehicles. Global geopolitical conflicts, insufficient electric vehicle charging infrastructure and scarcity of critical raw materials such as lithium, cobalt and nickel could hamper the optimal productivity of the electric vehicle industry.

According to the J.D. Power Electric Vehicle Experience Public Charging Study, the number of failed charging attempts increased from 15% in Q1 2021 to over 21% in Q3 2022.

In addition, affordability remains a barrier to adoption. According to a study, only 8% of Americans actively consider an electric vehicle as their next means of daily transportation.

Given the backdrop, it may be best now to avoid fundamentally weak EV stocks NIO Inc. (NIO), Rivian Automotive, Inc. (RIVN) and Mullen Automotive, Inc. (MULN), whose price has decrease.

NIO Inc. (NIO)

Based in Shanghai, China, NIO designs, develops, manufactures and sells smart electric vehicles in China. It offers five-seat, six-seat and seven-seat electric SUVs and smart electric sedans.

NIO's anticipated EV to Sales ratio of 2.00x is 62% better than the industry average of 1.24x. Its price/forward sales of 2.27x is 137.3% above the industry average of 0.96x.

NIO's trailing 12-month gross profit margin of 14.43% is 59.2% below the industry average of 35.33%. Its negative net profit margin of 25.27% over the last 12 months is below the industry average of 4.81%.

NIO's operating loss was $544.08 million for the three months ended September 30, 2022, up 290.2% year-over-year. Its overall loss increased 30.9% year-over-year to $522.44 million.

NIO's EPS is expected to decline 26% year-over-year to minus $0.27 for the unreported quarter ending December 2022. Over the past year , the stock lost 56.8% to close the last trading session at $10.03.

NIO's POWR ratings reflect its weak outlook. It has an overall rating of F, indicating a strong sell. POWR ratings rate stocks on 118 different factors, each with its own weighting.

Furthermore, the stock has a D rating for Growth, Stability, Sentiment, and Quality. NIO is ranked No. 51 out of 61 stocks in the auto and vehicle manufacturing industry. Click here to access additional POWR ratings for NIO (Value and Momentum).

Rivian Automotive, Inc. (RIVN)

RIVN designs, develops, manufactures and sells electric vehicles and accessories. The company offers five-seat pickup trucks and sport utility vehicles.

RIVN's EV/Forward Sales of 4.13x is 234.2% higher than the industry average of 1.24x. Its forward price/sales of 10.82x is significantly above the industry average of 0.96x.

Its negative trailing 12-month ROCE and ROTC of 127.71% and 38.22% are below industry averages of 12.47% and 6.37%.

RIVN's operating loss was $1.77 billion for the three months ended September 30, 2022, up 128.6% year-over-year. Its net loss rose 39.8% year over year to $1.72 billion. Additionally, its cash and cash equivalents were $13.27 billion for the period ended September 30, 2022, compared to $18.13 billion for the period ended December 31, 2021.

Street expects RIVN's EPS to fall 31.7% annually over the next five...