Auto Stocks to Avoid

Over the past year, some of the auto stocks we see in the market have been great and offered the returns that many investors desire.

On the other hand, there are some stocks that you should be skeptical of before putting your money into them. The question you’ll have to answer is which stocks you should shy away from when you’re ready to invest your money as we get ready to turn the calendar to another year. Let’s take a look and see which stocks you should watch but avoid for now when you’re ready to make an investment.

Nikola (NKLA)

Nikola is a US-based company that develops and integrates energy and transportation solutions through Trucking and Energy. This company reported losses of 59.8 percent compared to last year for the second quarter of 2021. The net loss grew by 23.7 percent compared to the same time a year ago. Experts project continued decline going into next year, and that will make it difficult for you to invest with any confidence in this company. They have been graded poorly for value, stability, growth, and quality. If you’re looking for a stock to avoid going into the next year, Nikola is one of those companies.

Proterra Inc. (PTRA)

Proterra Inc. develops and produces commercial electric vehicles. Among auto stocks, you just might want to find another place to put your money. There are three operating segments of this company, Proterra Powered, Proterra Energy, and Proterra Transit. Losses for this company grew to 38.7 percent compared to the previous year, and the net loss surged to 732.8 percent compared to the same time from the year before. This company might turn things around, but you need to simply keep a watchful eye on this brand to see if it will be one you want to invest in.

Hyzon Motors Inc. (HYZN)

Hyzon Motors Inc. is a hydrogen mobility company that produces commercial hydrogen cars and fuel cell systems. The primary focus for this company is on medium and heavy-duty vehicles, which include public transportation in many cities, including coach buses. Allegations of wrongdoing in the company have raised red flags recently, and two of the chief technology officers of the company resigned within the first 20 months of operation. This company has lost $9.27 million compared to last year, and its stock share has plummeted with the allegations against the company.

Workhorse Group Inc. (WKHS)

Workhorse Group Inc. creates and distributes battery-electric vehicles and aircraft along with cloud-based, real-time telematics performance monitoring tools. This company works to create items that help fleet operators save time and money. Workhorse is one o the worst auto stocks for you to invest in right now. An investigation has begun into potential securities law violations that could negatively impact the price of the stock. With a massive increase in operating expenses, the operating losses came in at 34.42 billion for the past year. This is a company that’s on the decline and not one you want to invest in going forward.

QuantumScape (QS)

The team at QuantumScape is developing a solid-state lithium-metal battery that could change the world of electric vehicles for the future. This new battery is expected to charge to full capacity in only ten minutes, and it should be more stable and offer greater energy density than the current batteries we see in the market. All of this sounds like a company you should invest in, but This company has been overvalued to the point of having a projected valuation of more than what Ford and FCA both offer. You should wait for this company to level off before investing.

Electra Meccanica Vehicles (SOLO)

If you’re looking for an EV startup to get behind, this one isn’t the right choice for you. Among auto stocks, you’ll want to put your money somewhere else and avoid Electra Meccanica Vehicles altogether. There just isn’t much going for this company, and the Solo vehicle they have created is a three-wheeled single-seat electric commuter vehicle. The funds this company raises in the first stock run will be used to build a factory in the United States, but that isn’t enough to make this company one you should invest in.

Tesla (TSLA)

Isn’t Tesla one of the most successful EV companies in the world? Yes, they are, but that doesn’t mean that you should put your money into this company. The stock price has gone up significantly over the past few years, but several other companies are entering this market and look to be places where you should put your money instead of investing in Tesla. The fact that Tesla is now a true automotive company means that you might not be able to afford as many shares of the stock as you would if you looked at some of the newer companies.

Where Should You Put Your Money?

If you’re looking for auto stocks that you should invest in, there are a few that can make a huge difference in your portfolio.

Ford (F)

Ford is always a safe bet as a place where you want to put your money. You know the vehicles; you’ve probably driven a model from the blue oval, and you’ve respected what this company has to offer for a long time. Unlike Tesla, Ford stock prices aren’t astronomically high, and you can purchase several shares of this stock and let them grow to give you the returns you’re looking for. With the addition of several near models, excellent programs geared toward kids, and continued advancements in the automotive world make this a company that’s right for you.

Nio (NIO)

Nio has been on the rise for several months and is one of the hottest new EV companies in the market. With new orders at an all-time high, this company is building cars and delivering them as fast as they possibly can. The most recent reports of revenues are up $1.3 billion, which is an increase of 127.2 percent from the same quarter only a year ago. If you’re looking for a good place for your money, this is one of the best auto stocks for you to invest in.