Polestar (PSNY), Canoo (GOEV), and Faraday Future (FFIE) stock prices have tumbled this year amid the rising concerns about the electric vehicle (EV) industry. Polestar’s stock has crashed by more than 69% this year while Canoo and Faraday Future have tumbled by 70% and 42%, respectively.
Polestar vs Canoo vs Faraday Future stocks
These companies have collapsed because of their slow growth and strained balance sheets. Data shows that Faraday Future ended the last quarter with less than $5 million in cash even as its net loss came in at over $400 million.
Canoo had about $9.6 million in cash, down from $12.7 million in the December quarter. Polestar has over $951 million in cash and short-term investments while it is continuing to make substantial losses.
Worse, Volvo has announced that it will stop funding the company. It has also hinted that it will hand its stake to Geely.
There is another bad news to consider. On Thursday, Nikola stock tumbled by more than 31% after the company announced that it would do a 1-for-30 reverse split in a bid to gain compliance with Nasdaq.
Polestar and Faraday Future stocks were trading at $0.70 on Thursday and has remained below $1 since May. After going through a short squeeze in May, Faraday Future stock has moved below $1 since May 29th.
This means that Faraday Future and Polestar will need to do a reverse stock split in a bid to maintain their listings.
Canoo is also not doing well as it has crashed hard in the past few months. It was trading at $1.80 on Thursday, meaning that it could drop to below $1 in the coming months. This is important because Canoo implemented a 1-23 reverse split that pushed its stock to almost $5.
If these reverse stocks happen, there is a likelihood that their stocks will tumble as we saw with Nikola this week.
Polestar, Faraday Future, and Canoo face other challenges ahead, including their increased cash burn and the rising competition. For Polestar and Faraday, most of this competition is coming from the likes of Huawei, Lucid, and Lotus Technology.
Canoo’s competition is coming from other corporate-focused companies like Workhorse Group and Rivian.
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