As the race to survive in the electric vehicle world tightens, it’s probably time to consider with EV stocks to avoid.

Besides Tesla (NASDAQ:TSLA) which is already a leader, there are several other EV makers who are trudging through the initial years of growth. However, the crowded market may make it difficult for many companies to survive.

There are a few EV makers that are far from profitability and are struggling with manufacturing. They have a lot to prove moving forward and investors need to be aware of such overvalued EV stocks that are best avoided.

With that in mind, let’s take a look at the three EV stocks to avoid this June. 

Rivian (RIVN)

There were high hopes for Rivian (NASDAQ:RIVN) after it went public in 2021 but now it s looking like one of the EV stocks to avoid.

The company sells three models, which include an SUV, a pickup truck, and a delivery van. The company had big plans, but the timing wasn’t right. It struggled during the pandemic and had to suffer from the supply chain issues.

However, the company keeps struggling with manufacturing and hasn’t been able to achieve its ambitious goals.

Rivian had a target of 25,000 units for 2022 and it produced 24,337 units. This year, it aims to produce 50,000 units and has produced 9,395 vehicles in the first quarter. 

The automaker is burning more cash than it is generating, losing money on each vehicle it builds. It had $12.1 billion in hand and burned $6.7 billion in 2022. The management plans to raise more cash through convertible bond offering. 

RIVN stock is down in the last six months. The company also faces the risk of being removed from the Nasdaq 100 index, which would be a huge blow at this stage.

Barclays analyst Dan Levy sees an opportunity with the stock and believes that the EV maker can address the manufacturing process improvements while working on the cost-cutting goals. The analyst has a buy rating with a price target of $22, which is about 59% upside from the current level.

However, I think the company is under immense pressure, and investing in the stock at the current level could be a huge risk. It may have a good product but that is not enough to survive amid competition which makes RIVN one of the risky EV stocks.

Lucid Group (LCID)

Another one of the high-risk EV stocks is Lucid Group (NASDAQ:LCID). It aimed to produce between 12,000 to 14,000 vehicles in 2022 and only produced 7,180. It has set a target of 10,000 this year, well below its previous guidance of 49,000, and has produced only 2,314 in the first quarter. 

In the first-quarter results, the company reported a revenue of $149.4 million and lost $1.04 billion in free cash flow. It reported a net loss of $779 million. Despite winning awards for Lucid Air, the company is struggling on several fronts.

The EV industry is tightening and Lucid has many financial challenges to overcome. Lucid only has $3 billion on hand and unless it manages to raise funding from Saudi Arabia’s Investment Fund, it could be in trouble.

It aims to issue $1.2 billion in new shares to the public and this will lead to high share dilution. It also plans to sell $1.8 billion worth of common stock to the Public Investment Fund which is a Saudi wealth fund.

The purchase will allow them to maintain 60.5% ownership in the auto company. However, this isn’t a long-term solution to its troubles. Unless Lucid increases production and cuts down on costs, it cannot sustain itself for long.

LCID stock is trading at $6.90 and is down 63% in the year. It has gone from a high of $21 to below $10 now.

Lucid showed a lot of potential in its initial days when it got Saudi Arabia’s backing, but the company hasn’t been able to increase production. We may not see Lucid report any profits in the near term and there is still a question mark on its survival.

Lordstown Motors (RIDE)

Lordstown Motors (NASDAQ:RIDE) has never impressed me. The company aims to electrify commercial fleets. The idea was interesting, but the execution didn’t go well. It has been burning cash.

The only thing positive about this EV maker is its zero debt balance sheet but it isn’t a good reason to put your money in the stock. RIDE stock is trading at $3.10 today and has lost 80% since the beginning of 2023. It recently announced a 1-for-15 reverse stock split to increase the price of its stock. It is one of the top EV stocks to avoid for several reasons. 

The company’s Endurance electric truck had to be recalled because of a brake issue. This is the third recall, and the company has halted production and deliveries temporarily. RIDE is one of the EV Stocks with high volatility 

Its loss from operations is growing. Profit was down 91% in the first quarter as compared to the same quarter the previous year.

To add to its already ongoing trouble, the company has a standoff with Foxconn which can put its going concern status in jeopardy. Foxconn’s investment in Lordstown hasn’t materialized yet and this means the company could lose its major source of funding.

The stakes of the EV maker filing for bankruptcy are high. RIDE is one of the EV stocks to avoid at all costs. 

On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.