Investors should be eyeing EV stocks to sell in anticipation of an approaching downturn. Investors should trim their positions in high-risk industries as uncertainty looms.

Market experts have sounded the alarm, predicting a U.S. recession in the year’s second half. Given the significant economic danger on the horizon, many would happily accept a mild recession given the risks ahead.

Adding to the concerns, President Joe Biden warned of a possible economic disaster. If a consensus is not reached over raising the country’s $31.4 trillion debt ceiling, there could be trouble.

Riskier bets, such as EV stocks could face significant headwinds in this precarious environment. Therefore, investors should reevaluate their exposure and consider these EV stocks to sell.

Lordstown Motors (RIDE)

Once a budding player in the EV space, Lordstown Motors (NASDAQ:RIDE) raised eyebrows with an SEC filing hinting at possible bankruptcy.

Foxconn’s decision to cancel last year’s investment agreement could prove to be a lethal blow for the troubled business.

The company’s mounting liquidity concerns could pose significant challenges.

Furthermore, the Ohio-based EV maker’s recent going concern notice also sheds light on its struggles to manage costs, funding concerns, and the ability to sustain the production of its Endurance vehicle.

On top of that, Foxconn’s decision to retract its $170 million investment in the firm could arguably be the final nail in the coffin. If the company fails to resolve the Foxconn dispute, a bankruptcy filing in the second half of this year seems plausible.

Moreover, despite the absence of long-term debt obligations, the potential recovery for shareholders should be negligible. Therefore, it’s best to consider offloading your positions at Lordstown Motors.

Electrameccanica Vehicles (SOLO)

Electrameccanica Vehicles (NASDAQ:SOLO) may envision itself as an innovator in the crowded EV niche with its three-wheeled electric vehicle, but the annals of history remain doubtful.

Its compact EVs are up against a steep challenge in an industry that has historically been receptive to tri-wheeled alternatives. Furthermore, its niche-focused approach has yet to prove its commercial feasibility in an intensely competitive landscape.

The company is burning through an estimated $20 million in cash reserves each quarter. Its decision to shift EV production from China to the U.S. should weigh down its bottom line further.

Though it aims to reduce costs through workforce layoffs, this short-term solution merely masks a more deep-rooted issue.

As my fellow InvestorPlace contributor Josh Enomoto highlighted, we are remarkably close to the arrival of a $25,000 EV, making a four-wheel EV slightly more expensive than Electrameccanica’s Solo. SOLO stock exhibits poor fiscal stability, painting a grim picture for the future.

Faraday Future (FFIE)

Faraday Future (NASDAQ:FFIE) made waves with its patented FF91 luxury EV back in 2017, aiming for production in 2018. However, like many EV startups, it’s faced a series of delays, relying on massive capital injections to stay afloat.

Perhaps what’s most concerning is Faraday’s plans to launch its FF91 EV at a staggering starting price of $180,000. In the next couple of years, automakers will focus on delivering more affordable EVs.

This will pressure the high-end market, particularly if the U.S. economy plunges into a recession.

The most pressing issue for the firm, though, is its precarious financial position. Launching a new vehicle is costly, and having reported a cash burn of more than half a billion dollars last year, bankruptcy remains on the cards.

With less than $18 million in cash, including restricted cash, the company needs a massive capital infusion to execute its three-phase delivery process, which seems unlikely at this point.

On the date of publication, Muslim Farooque did not have (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