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Electric vehicle startups have sprung up in droves to capitalize on the industry’s massive growth potential. For investors, identifying the top electric vehicle startups could result in multi-bagger returns down the road. Think about the Chinese EV firms such as Nio, which generated a price return of over 150% over the past three years. Others could have similar potential, especially with the EV market estimated to grow by a tremendous 17.1% to $691.5 billion through 2028.
That said, let’s look at three electric vehicle startups to keep tabs on this year.
Atlis Motors (AMV)
Up-and-coming EV company Atlis Motors (NASDAQ:AMV) made waves last month after its stock gained 200% in value during a trading session on Jan. 11. AMV stockholders were reminded of its Nasdaq debut last year when it gained over 500% after-hours trading. The EV truck and battery maker shares gained last month after it announced it had secured two gigawatt-hours worth of preliminary orders. Moreover, the firm announced a 15-fold bump in daily battery output in late Jan. since the beginning of its mass production trials in Nov. last year.
Following its ambitious execution plan, the firm has rapidly scaled production in its Arizona facility to cater to the heightened demand for its batteries. According to its CEO Mark Hanchett, Atlis has gone from building 30 battery cells per week to manufacturing hundreds of them weekly. Hence, if it continues on this growth trajectory, AMV stock could turn its fortunes around quickly.
REE Automotive (REE)
Based in Israel, REE Automotive (NYSE:REE) provides customized EV platforms for various vehicles, including cars, delivery vans, buses, and trucks. What makes its model unique is that instead of companies having to build an entire vehicle from scratch, they can use REE’s modular platform technology and put their own “skin” on it. However, the trouble for the company is that most EV makers don’t need to outsource production. Also, up-and-coming EV makers are in a rough spot fighting for visibility in a saturated market, which leaves REE stock in a precarious position.
The stock is down over 90% year-to-date and expects operating expenses to come in between $100 million to $120 million for the year. Moreover, cash equivalents are down from $295 million when the firm went public and will likely exit the year at around the $80 million mark.
Canoo (NASDAQ:GOEV) is another in the long list of EV businesses that went public via SPAC. It had offered lofty revenue projections for its subscription revenues and engineering services. However, as of now, it hasn’t generated any meaningful sales while its balance sheet remains in shambles, calling into question its ability to survive this year. With Canoo, its current liabilities comfortably outweigh its current assets base. It has just $40.4 million in its cash till, while current liabilities are at a whopping $183 million. Additionally, its negative free cash flows and zero dollars in sales aren’t helping matters either.
Also, a wave of executives have left the company, further weakening its bull case. Indeed, the prospects for Canoo aren’t looking pretty, which leaves it in an unwarranted position to raise cash for its survival. Hence, it should probably be on bankruptcy watch.
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On the date of publication, Muslim Farooque 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 biedexmarkets.com.com Publishing Guidelines.