The stock market was mixed on Tuesday, but the Nasdaq Composite (^IXIC -0.18%) managed to gain some ground. As of 12:30 p.m. EDT, the Nasdaq was higher by two-thirds of a percent, topping other benchmarks that were flat to lower on the day.

However, some of the best-performing stocks on the Nasdaq were among those losing ground today. FuelCell Energy (FCEL 14.51%) was a notable decliner that pulled down shares of several other companies related to fuel cell technology and hydrogen. Meanwhile, investors in the electric vehicle (EV) space took notice of Volkswagen (VWAGY -1.07%) and its efforts to beat Tesla (TSLA -3.48%) at its own game.

FuelCell loses energy

Shares of FuelCell Energy were down 7% at midday on Tuesday. That pulled shares of related stocks lower as well, as Plug Power (PLUG 10.71%) fell 5%. Ballard Power Systems (NASDAQ: BLDP) settled for a modest 1% decline.

A blue fuel cell.

A fuel cell. Image source: Getty Images.

FuelCell's fiscal first-quarter financial report was disappointing for bullish investors. Revenue was down 9% from year-ago levels, and that resulted in a much larger operating loss than in the previous year's period. Backlog dropped by about 7% year over year to $1.27 billion. Net losses amounted to nearly $46 million, 14% worse than in the first quarter of fiscal 2020.

FuelCell reported weakness across the board. Revenue from service agreements and licensing arrangements was down 12%, while generation revenue fell 10%, and advanced technologies contracts produced 3% less in sales.

Those numbers followed weak results from Plug and Ballard earlier in the quarter. Although investors are generally excited about the Biden administration's stance toward renewable energy and alternatives to fossil fuels, they still need to see FuelCell take advantage of that more favorable climate in ways that show up on its bottom line.

Does Tesla face a threat from VW?

In the electric vehicle industry, stocks were mixed. Volkswagen shares rose almost 7% at midday Tuesday, while Tesla gave up early gains and was down 2%.

Volkswagen has been an unsung player in the electric vehicle market, and in multiple presentations this week, VW has outlined an ambitious strategy to focus more on EVs. VW wants to deliver 1 million electric vehicles to customers this year, more than doubling its previous pace. To do so, the German automaker will adapt a standardized platform-manufacturing model for use with batteries, charging equipment, and software for electric vehicles.

In addition, VW expects to boost other key elements of EV production and adoption. It will build six battery cell plants across Europe to supply the market, and it will look to make EV charging infrastructure more readily available across the globe in order to support electric vehicle sales.

Meanwhile, Tesla has the lead in EVs, but distractions like a dubious new title for CEO Elon Musk and federal investigations into a Tesla car crash in Detroit aren't building confidence in the stock right now. To fight back against VW, Tesla needs to up its game and remind investors how it got to where it is today.