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The chip shortage is projected to reduce global auto output by 7.1 million vehicles in 2021. The rising cost of semiconductor chips is another reason EV manufacturers are scaling down their output. As a result, many EV companies’ revenue and earnings growth forecasts will likely remain weak in the coming quarters.
Given the bleak outlook for the EV industry, we believe that financially unstable EV stocks Faraday Future Intelligent Electric Inc. (FFIE), Canoo Inc. (GOEV), and GreenPower Motor Company Inc. (GP) are best avoided now. These stocks have declined more than 15% in price over the past week.
