During 2020, the EV market became the new gold rush. Investors were chasing anything labeled “green.” The race was (is) on to find the next Tesla. Every legacy automaker and many start-ups tried to “get in” on the action and lost a lot of money.

The combined peak market capitalization of Nikola, Fisker, Rivian Automotive, Lucid, NIO, XPeng, Polestar Automotive, Canoo, and Lordstown Motors was once about $470 billion. The peaks for those start-ups occurred from 2019 to 2021, when benchmark interest rates ranged from about zero percent to 2%.

Today, the market caps add up to about $59 billion—a drop of 87%. Investors have lost their appetite for stocks that don’t generate free cash flow. Over their histories, that group of nine has used about $46 billion in cash combined to build their businesses.

We recommended CHPT, FSR, FFIE, GOEV, and LCID as a short to our clients.

Last week, we focused on EV batteries' efficiency (or lack thereof) during extreme weather.

@nathanworden @stockopine