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Electric vehicle (EV) stocks have had a tumultuous few years. A number of factors have made some electric-vehicle stocks very risky for investors. Particularly dangerous are EV makers that are generating huge losses, are running low on cash and are far from mass producing EVs.

The first factor that has made some EV stocks very dangerous is that the competition in the EV sector in general (and the consumer EV sector in particular) is rapidly heating up.

"In the first quarter of 2021, Americans bought 18 different EV models. In the first three months of this year, they bought 32 different models. We expect there to be at least 50 for sale by the end of 2022," Kelley Blue Book reported in April.

Further illustrating the point, Hyundai, which used to be an afterthought in the EV sector, introduced an EV that won the 2022 World Car of the Year title

In the consumer electric pickup sector, Ford (NYSE:F), GM (NYSE:GM) and Rivian (NASDAQ:RIVN) have all launched very well-received, high-potential offerings.

Finally, in the low-cost EV sector, GM recently radically cut the price of its Bolt offerings, and a number of cheap Chinese EV models are likely headed to America sooner rather than later.

Contrast that with higher interest rates and investors' increasing skepticism towards unprofitable EV makers that haven't started mass production yet, and you have a whole class of EV stocks that likely are going nowhere. Many EV stocks look poised to fall to $0 within 30 months or so.

Workhorse (WKHS)

While many of the company's competitors have long completed the design and development of their electric trucks, Workhorse (NASDAQ:WKHS) is still putting the final touches on the overhaul of its flagship C1000 electric trucks.

"Over the past 9 months, we have redesigned over 26% of the parts on the C1000, and we feel we now have a safe, reliable and capable vehicle to sell to our customers," Workhorse CEO Richard Dauch said on the company's Aug. 9 Q2 earnings conference call.

Moreover, the fact that a number of the C1000s that the company had previously delivered had to be recalled and repaired has likely harmed its reputation among the commercial customer base that it's targeting.

Consequentially, it's not surprising that Workhorse does not seem to have any partnerships with major delivery companies.

What's more, unlike competitors Rivian and Arrival (NASDAQ:ARVL), I saw no evidence that Workhorse has a reassuring backlog of tens of thousands of reservations for its trucks.

As of the end of Q2, Workhorse had relatively low cash reserves of $140 million making it one of the EV stocks to absolutely stay clear of.

Lordstown (RIDE)

Lordstown (NASDAQ:RIDE) is also a company undergoing difficult transitions. Just last month, the company named a new CEO (its president, Edward Hightower, was elevated to the role) and selected a new executive chairman, Daniel Ninivaggi.

Meanwhile, Lordstown is going to start primarily relying on Foxconn, a manufacturing company with little or no experience in the auto sector, to produce its flagship electric truck, the Endurance.

In a sign that both Lordstown and Foxconn may not be up to the task of producing the Endurance, Lordstown earlier this month stated that it is seeking "partners to jointly scale the Endurance. "

The automaker, which had $236 million of cash at the end of Q2, indicated that it will have to raise additional funds relatively soon.

Finally, on the company's Aug. 2 Q2 earnings call, Hightower said that the company is "seeking strategic fleet partners for the Endurance and a limited number of anchor customers for the first vehicle to be produced with Foxconn through our joint venture."

So it appears that Lordstown, like Workhorse, does not have any huge customers eagerly waiting to buy its EVs.

Mullen Automotive (MULN)

In previous columns, I've detailed the reasons why investors should be skeptical of Mullen (NASDAQ:MULN).

Specifically, the credentials of the organizations that tested the automaker's in-house EV battery aren't very impressive. Moreover, the Chinese company with which Mullen created the battery went out of business.

Also boding poorly for Mullen is the fact that it does not intend to start delivering its EVs until 2025. Although the automaker said that it had a Fortune 500 customer, it has failed to identify that company.

Finally, Hindenburg, an investment research firm that was shorting MULN stock in prior months, alleged that Mullen's CEO, David Michery "led 5 failed penny stock companies prior to Mullen."

Since MULN stock is changing hands for so inexpensively, it looks cheap on the surface. But its market capitalization is a hefty $400 million, and it had a paltry $99 million of cash as of Aug 9., indicating that the shares can fall much further and will, in all likelihood, hit $0 in the not-too-distant future.

On the date of publication, Larry Ramer held long positions in RIVN and ARVL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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