Electric vehicle stocks tend to get into a strong rally for no apparent reason. Lucid Group (NASDAQ:LCID) broke out from the $20 support level. Lordstown Motors (TSX-V:LORD), which has serious production issues, rallied recently. And Fisker (NYSE:FSR) reversed from strong selling.
Why are these EV stocks so hot? Tesla (NASDAQ:TSLA) also rallied. Markets signal the growing market will not threaten Tesla’s market share.
Lucid has premium EVs coming to market. After it sells a few hundred units, it needs to ramp up the production of mainstream units. When that happens, investors will find out if Lucid has economies of scale. For now, the company is valued as if it will reach profitability within a few quarters.
Fisker’s Ocean is promising. It will appeal to the mainstream market. It will need continued demand to report shrinking losses. Fisker has a strong operating partner: Magna International (MGA). Magna already makes the Toyota Supra and BMW Z-series. It can build Fisker EVs at low costs.
Lordstown’s truck is promising. Its priority, however, is a cash raise. Its new CEO, Daniel Ninivaggi, will need more cash for research and development activities.
On Reddit’s WallStreetBets, Canoo (NASDAQ:GOEV) is a favorite pick. Its skateboard platform will cut production costs and support more model types.