FFIE - Electric vehicle jolts: Stocks that have scorched shorts this year vs. the short winners

2023-07-19 11:54:45 ET

S3 Partners Research updated on Wednesday on the short interest backdrop in the U.S. Auto & Truck manufacturing sectors. Ihor Dusaniwsky noted short interest on automaker names is at $43.6B, with about $33.3B of that tally in electric vehicle stocks. The largest short by dollars is Tesla ( NASDAQ: TSLA ) with $26.3B of short interest with Rivian Automotive Inc ( RIVN ), NIO Inc ADR ( NIO ), Lucid Group Inc ( LCID ) and Li Auto Inc ADR ( LI ) all distant laggards strictly by dollars. The auto sector continues to be a favorite target of short sellers. Float for automakers at an average of 6.14% is higher than the U.S. market average of 4.99% and average stock borrow costs of 1.49% in fees are almost double the U.S. market average of 0.77% in fees.

There were only five automaker stocks with over $100M of year-to-date mark-to-market profits for shorts, while there were six stocks with over $100M in year-to-date mark-to-market losses. The EV stocks that have been big winners for shorts in 2023 are Mullen Automotive ( MULN ), Lordstown Motors ( OTC:RIDEQ ), Faraday Future Intelligent Electric ( FFIE ), Workhorse Group ( WKHS ), and Canoo ( GOEV ). On the flip side, shorts have been scorched this year with trades on Tesla ( TSLA ), Rivian Automotive ( RIVN ), Li Auto ( LI ), XPeng ( XPEV ), Lucid Group ( LCID ), Nikola ( NKLA ), and Electrameccanica Vehicles ( SOLO ) all highly unprofitable.

Looking ahead, S3 Partners warned on four electric vehicle stocks that are "crowded shorts" based on proprietary data. Fisker ( FSR ), Hyzon Motors ( HYZN ), Lucid Group ( LCID ), and Nikola ( NKLA ) are seen as the names at risk of being unprofitable trades for the short crowd.

In the broader auto retail sector, highly-shorted Carvana ( CVNA ) jumped 34.4% in Wednesday morning trading after announcing a cooperation deal with activist investor Elliott Management. Vroom ( VRM ) broke 17.66% higher.

Long vs. short: Which electric vehicle stocks look to be the best short squeeze candidates or see the juiciest profits for shorts?

More on auto stocks:

• Tesla earnings preview
• EV jolts: Rivian Automotive could break free of exclusivity deal with Amazon
• Lucid Group is expected to face more pressure to meet deliveries expectations

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