Bankruptcy Alert: 3 EV Stocks to Sell Now Before They Plunge

Stocks to sell

Amidst turbulence in the EV market, identifying EV stocks to offload in April is crucial. This past year has certainly posed challenges to this sector. Declining demand and increased incentives for EV buyers have prompted a period of re-consideration for many investors.

In short, many more companies now appear to be on the brink of bankruptcy than we’ve had in years past. Some of that concerns the seeming death of zero interest rate policy (at least for now). Indeed, the macro environment plays a big role in shaping how successful investors in EV stocks will be over an extended period.

However, there are other sector-specific concerns that keep many investors up at night as well. EV companies are among the hardest hit by the current backdrop, from shifting demand dynamics to input price volatility, quality control issues and an increase in auto loan rates. That means from Tesla (NASDAQ:TSLA) on down the list, there are a myriad of names that are swimming in a sea of red right now.

I think three are among the most pernicious to consider right now.

Fisker (FSR)

The Fisker (FSR) logo hangs on display at the November 2011 International Auto Show. Fisker stock

Source: Eric Broder Van Dyke /

The first EV company on this “sell” list is Fisker (NYSE:FSR). To put it nicely, Fisker has been going through several issues recently. 

Fisker’s Ocean SUV model faces several severe safety concerns, immediately making this stock one of the higher-risk options in the sector. Numerous complaints of power loss and braking issues have raised alarms, at least for me. Quality is an important factor many investors are increasingly paying attention to, and on this front, Fisker appears to be missing the boat.

Due to door malfunction complaints, the U.S. auto safety regulator initiated a preliminary probe into Fisker’s 2023 Ocean SUVs. The National Highway Traffic Safety Administration (NHTSA) received 14 reports of intermittent latch and handle failures, impeding door opening. Facing financial struggles, Fisker awaits the outcome of the investigation.

That’s the tip of the iceberg regarding the company’s fundamental issues. Despite slashing the price of the Fisker Ocean, the US automaker struggled to retain customers for its electric SUV. Internal data revealed over 40,000 cancellations out of 70,000 reservations, posing serious financial challenges.

Each reservation required a $250 deposit, potentially costing Fisker up to $9 million in refunds. With the company likely to pursue a debt restructuring, bankruptcy could be in the cards in the quarters or years to come.

Canoo (GOEV)

Canoo (GOEV) logo displayed on smartphone screen as well as in background on yellow wall


Canoo (NASDAQ:GOEV) is a company that was supposed to benefit from a flood of adoption in the EV sector. The company’s rather unique-looking vehicles were touted as the future of transportation. When their design was first released, Canoo’s lifestyle vans were intriguing, but the company simply hasn’t seen the kind of growth it was expecting. Not at all.

Canoo’s stock price has plummeted as the company faced challenges in providing any sort of revenue growth. The company’s reported EBITDA loss of $54.6 million and revenue of only $367,000 missed expectations by a wide margin. Wall Street anticipated a more minor loss of $45 million with higher sales of $700,000. And that was a low bar to beat (in my opinion).

With revenue not hitting the mark, there’s little to go on as a reason to own this stock at current levels. Yes, the company is producing income, and this is Canoo’s second revenue-generating quarter. But that won’t be enough to entice long-term investors to this name. Until the company hits some sort of reasonable growth trajectory, count me out on this one.

Workhorse (WKHS)

Person holding cellphone with logo of American electric vehicle company Workhorse Group Inc. (WKHS) on screen in front of webpage. Focus on phone display. Unmodified photo.

Source: T. Schneider /

EV company Workhorse (NASDAQ:WKHS) has been experiencing turbulence lately, with WKHS stock declining more than 30% over the past month. However, while the stock’s oversold status may provide optimism for some dumpster-diving investors, I think it’s a dumpster fire that’s best avoided at current levels.

Workhorse has barely avoided bankruptcy thus far, producing only four vans per week. The company relies heavily on government aid to support its balance sheet. And despite these grants and subsidies, the company continues to burn through cash as it remains unprofitable on every vehicle it sells.

Bringing in only $8 million of revenue through the first nine months of 2023, the company’s net loss of nearly $80 million has eaten into the company’s debt pile. This has led to layoff announcements, in which the company’s CEO Rick Dauch said Workhorse will transition to a less capital-intensive service model.

I question whether this transition will be too little too late for the struggling EV maker. This is a stock I think is too dangerous to own at current levels. Invest at your own risk.

On the date of publication, Chris MacDonald 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.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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