In navigating the turbulent waters of the stock market, it’s probably the right time for investors to identify the worst performing EV stocks to sell as a potential downturn looms. The gathering clouds of uncertainty suggest a need for portfolio reevaluation, particularly concerning high-risk sectors such as the EV sphere.

The promise of long-term returns in the EV market is undeniable, but increased competition presents new challenges. Traditional automakers are entering the EV space, intensifying competition and impacting the trajectory of pure-plays in the niche.

Another factor to consider is the potential of a recession, a fear heightened by current macroeconomic indicators, including a decline in EV stocks. Therefore, it’s high time to consider which of the worst performing EV stocks to sell in June. In fact, here are seven to consider selling today.

Worst Performing EV Stocks: Lordstown Motors (RIDE)

The future seems remarkably bleak for EV upstart Lordstown Motors (NASDAQ:RIDE), a company most analysts have had major reservations over for a long time. Unfortunately, its ongoing standoff with Foxconn threatens its going concern status. As its management communicated last year, unless there is a resolution soon, Lordstown is set to lose crucial funding needed to keep its business afloat.

Lordstown is considering its legal and financial options if no agreement is reached. Foxconn’s planned investment of $47.3 million, approved by U.S. authorities on April 25, has yet to materialize. Lordstown hasn’t received the funds or approval for its operational budget. Therefore, given these circumstances, the prospect of Lordstown filing for bankruptcy soon is increasingly likely, making it an EV meme stock to avoid.

Canoo (GOEV)

Another one of the worst performing EV stocks to sell is Canoo (NASDAQ:GOEV). Once a promising contender in the EV sphere, it now finds itself stuck in the mud. A series of financial blunders have eroded the firm’s value, leading to an eye-watering stock price decline of more than 83% in the past year. It has shed more than 50% in value in the past six months alone.

What’s more concerning is its dwindling cash reserves, which rest at a precarious $6.7 million after the first quarter. At the end of last year, its cash reserves were at $36.6 million and have fallen by roughly 82% in the first quarter. All signs point towards an impending financial crunch as bankruptcy concerns loom large. Furthermore, with executives leaving in droves over the past year and a likely de-listing from NASDAQ on the horizon, it’s best to avoid investing in the ailing business.

Electrameccanica Vehicles (SOLO)

Though some may believe in Electrameccanica Vehicles’ (NASDAQ:SOLO) three-wheeled EV approach, the reality is quite the opposite. The firm is contending with challenging headwinds in its traditionally receptive sector niche to embracing tri-wheeled alternatives. Moreover, the viability of its niche-focused approach remains unproven in the hotly competitive EV market.

More importantly, the company’s financial health raises major red flags, reportedly hemorrhaging over $20 million in cash reserves each quarter. A recent decision to shift EV production from China to the U.S. will likely further strain its bottom line. The firm’s move to slash costs via workforce reductions is a band-aid solution, hiding a deeper, systemic problem.

As fellow InvestorPlace contributor, Josh Enomoto pointed out, the impending arrival of a $25,000 four-wheeled EV will put further pressure on Electrameccanica’s Solo. With poor fiscal stability, expect the SOLO stock to continue trading in the red.

Lucid Group (LCID)

Chinese EV player Lucid Group (NASDAQ:LCID) has shed more than 61% in the past year. It recently released its first-quarter earnings results, painting a rather distressing financial situation. Sales missed the mark by a wide margin, underperforming by an alarming 30%. During the first quarter, Lucid rolled out a mere 2,300 vehicles, which pales compared to its prior quarterly output of 3,500. Moreover, the stark decline in production by a staggering 34% year-over-year is alarming.

Lucid’s significant negative gross margin is adding to its woes despite the steep price tag on its vehicles. High overheads and massive marketing and sales expenses have driven a considerable operating cash burn for the firm. In the recent quarter, the company’s reserves took an $800 million hit, leaving a cash position of just $3.4 billion. Given the present burn rate, the firm’s cash balance may last until Jan. 2024.

Faraday Future (FFIE)

Faraday Future (NASDAQ:FFIE) set ambitious goals back in 2017 with its patented FF91 luxury EV, targeting production the following year. However, much like its peers, Faraday has been marred by a tide of delays, sustained only by sizeable capital infusions.

Adding to concerns is Faraday’s bold plan to launch its FF91 EV at a staggering price of $180,000. With customers looking to pivot towards more affordable EVs in the coming years, this pricing strategy will likely falter, especially if the U.S. economy takes a downward turn.

But perhaps the most daunting obstacle for Faraday is its teetering financial health. Last year’s cash burn exceeded half a billion dollars, a staggering figure that brings bankruptcy incredibly close. With cash reserves dwindling to less than $34 million, Faraday requires a vigorous capital injection to implement its three-phase delivery plan.

Nikola (NKLA)

Phoenix-based EV manufacturer Nikola (NASDAQ:NKLA), famed for its popular hydrogen-electric trucks, is treading on thin ice. Moreover, despite matching consensus estimates with a 26 cents per share loss in the first quarter, it fell short of revenue estimates by $1.2 million and an adjusted EBITDA loss of $126.7 million, which comfortably outstripped expectations painting a dreary picture. The financial strain is evident, with Nikola scorching through $180 million in operating cash each quarter, with a dwindling cash reserve of less than $122 million.

The threat of a looming recession spells further trouble for Nikola, positioning it as a potentially significant casualty in the face of an economic downturn. Moreover, don’t forget that the same company was marred by a major scandal last year involving its founder, who was convicted on wire and securities fraud charges for falsifying claims and inflating Nikola’s stock price.

Fisker (FSR)

The journey for EV maker Fisker (NYSE:FSR) has been far from smooth sailing. After multiple delays in kickstarting production, the company finally rolled out its flagship Ocean SUV. However, its investors seem far from impressed at this point.

Moreover, with the backdrop of recession, luxury cars represent a risky bet, where Fisker faces a challenging road ahead against its rivals. The company’s footing is remarkably wobbly, coupled with an unsettling financial situation and recent quarterly results revealing a larger-than-expected loss. To add insult to injury, production guidance for the year has been slashed, lowering the bar from 42,500 EVs to a range of 32,000 to 36,000.

Despite its grand production plans, the excessive cash burn and dubious prospects of meeting the new production target make Fisker risky. Moreover, its stock trades at over 3,681 times, trailing twelve-month sales, making it a remarkably unattractive bet at this time.

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 InvestorPlace.com Publishing Guidelines