Why Lucid, Fisker, and Nikola Stocks Are Crashing This Week

This hasn't been a good week for stocks overall, with the S&P 500 index down more than 5% and potentially heading for its worst weekly performance since March 2020. Technology and growth stocks are also continuing 2022 declines, with the tech-heavy Nasdaq well into bear market territory, down more than 30% year to date.

Speculative electric vehicle (EV) stocks have been leading the way. This week, Lucid Group (NASDAQ: LCID), Fisker (NYSE: FSR), and Nikola (NASDAQ: NKLA) are good examples. The start-up EV companies had weekly drops of 12.9%, 7.7%, and 8.4%, respectively, as of late Friday morning, according to data provided by S&P Global Market Intelligence.

The macroeconomic environment has been driving investors away from higher-risk holdings. Lucid, Fisker, and Nikola are in a very capital-intensive business, and Fisker hasn't even begun production as of yet. While Lucid and Nikola expect meaningful revenue for the first time this year, there are so many unknowns related to their future that investors are fleeing these start-ups. The selling gained traction this week with the Fed's decision to boost benchmark interest rates faster than previously expected. Some investors interpret that as a sign that a recession is inevitable.

Source Fool.com