What happened

Shares of electric-vehicle makers Fisker (FSRN -14.37%) and Workhorse Group (WKHS 5.84%), and battery start-up QuantumScape (QS -1.65%) were all trading lower today amid a broad sell-off of tech-related growth stocks. 

Here's where things stood as of 3 p.m. EST relative to Wednesday's closing prices: 

  1. Fisker was down about 7.9%.
  2. QuantumScape was down about 8.9%. 
  3. Workhorse Group was down about 4.3%.

So what

Most electric-vehicle stocks were down on Thursday on concerns about potential inflation and signals from bond markets that interest rates could soon begin to rise. Another factor is the ongoing decline in category leader Tesla's (TSLA -1.92%) stock price. To some extent, the recent surges in these three stocks' prices were sparked by Tesla's huge run-up last year. 

An orange Fisker Ocean electric SUV, parked by the ocean.

Fisker said that its Ocean electric SUV will be followed in 2023 by a second model built by Foxconn. Image source: Fisker, Inc.

That said, each of these three companies may have been moving to some extent on news as well as on the broader economic concerns: 

  1. In a note on Wednesday, Wolfe Research analyst Rod Lache upgraded Fisker to peer perform from underperform and raised his price target for the stock to $30 from $21. Lache wrote that Fisker's plans to build a second electric vehicle with Taiwanese contract manufacturer Foxconn "changed the narrative" around the stock. While Lache still sees execution risks, the second vehicle -- expected by the end of 2023 -- addresses many of his earlier concerns about Fisker by offering a larger market opportunity and the potential for lower costs due to economies of scale. 
  2. Baird analyst Ben Kallo initiated coverage of QuantumScape on Thursday, with a rating of neutral and a price target of $52. While the target price reflects his financial model, Kallo wrote, the company's experienced management, strong balance sheet, and huge potential market for its solid-state batteries have him feeling optimistic about the stock, though he'll wait for more positive "proof points" before rating it more favorably.
  3. Workhorse said in a statement on Thursday morning that it has met with the U.S. Postal Service (USPS) about its bid to build next-generation mail vans. Although the USPS announced last week that another company had won the contract, Workhorse is exploring an appeal of the award. The company said that its meeting with USPS officials marked the "first step in what we expect may be a prolonged process" and added that it couldn't share details. 

Now what

While Workhorse built a small number of vehicles in 2020, Fisker and QuantumScape are "pre-revenue." All three trade on their perceived future potential, not on their current businesses. For auto investors, this period of volatility may be a good moment to reevaluate perceptions of the future potential of these companies. Trade carefully.