Electric car stocks took a beating on March 14 after reports surfaced that Fisker may be closer to preparing for bankruptcy. The news came less than a week after Rivian Automotive (NASDAQ: RIVN) unveiled its next-generation R2 electric vehicle (EV), as well as its R3 and R3X.

The sell-off has intensified since then. As of market close on March 22, , Lucid Group, Nio, and Rivian were all down between 31% and 54% year to date.

Fisker's financial woes are a painful reminder that an EV company's success ultimately comes down to its financials. Good products can drive sales, but not always profits if the business model isn't sound.

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Source Fool.com