Will the Tesla-wannabes shine or whine next week?

With a share price about 10 cents, $Faraday Future Intelligent Electric Inc.(FFIE)$  is cheaper than a penny stock and susceptible to wild swings in its share price every trading day, as opportunists try to take advantage of the price fluctuations for quick bucks. The company has until 25 June 2024 to execute reverse stock splits to bump up the stock price to meet Nasdaq Stock Market LLC's requirement to maintain a minimum bid price requirement of $1, failing which, its securities will be subject to delisting. Despite rumors of some white knight coming to the rescue that had led to a spectacular recovery of the stock last week, with deteriorating fundamentals and worsening order book, the stock has lost its appeal as a long-term investment and has become a highly speculative meme-stock play, shooting through the roof on short-squeeze in one day and plunging to the ground when fears of its poor fundamentals return the next day. Adding Faraday Future is like throwing good money after bad.

Its peer $Rivian Automotive, Inc.(RIVN)$  has also been facing downgrades by analysts as it continues to struggle with slowing demands, after its key sponsor Amazon ordered far fewer vans than previous commitment by the e-commerce giant to electrify its delivery fleet. To preserve cash as the money-losing EV maker focuses on producing and selling more affordable vehicles to boost demands, Rivian has announced delay of construction of a new $5 billion factory in Georgia, in addition to a previously announced layoff of 10% of its labor. Yet to generate sufficient operating cash flows, Rivian surely has to preserve cash to sustain operations, else it is projected that Rivian has only cash reserves to last through a couple more years.

Slowing EV demand has also been affecting the Chinese EV startup trio $NIO Inc.(NIO)$  , $XPeng Inc.(XPEV)$  and $Li Auto(LI)$  amidst a patchy recovery of the Chinese economy and that is not helped by prevailing price war in the EV industry and intensifying competition as more conventional vehicle makers and other EV startups like Xiaomi jump onto the EV bandwagon. With slowing demands and shrinking profit margins, I would refrain from adding my Chinese EV exposure until signs of recovery of the Chinese economy emerges.

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