What happened

Shares of several companies in the electric vehicle space had an exciting week, but "exciting" doesn't always mean good. While quite a few did well on the resurgence in interest in so-called meme stocks, at least one -- Lordstown Motors (RIDE -5.88%) -- had a rough ride on some grim news. 

Here's how the big movers in this space performed this week through Thursday's close. 

  • Canoo (GOEV 12.81%) was up about 12.4%.
  • Churchill Capital IV (CCIV), the special-purpose acquisition company set to merge with Lucid Motors, was up about 6%.
  • Fisker (FSRN -0.21%) was up about 10.6%.
  • Lordstown Motors fell 15.3% this week through Thursday's close.
  • Workhorse Group (WKHS -10.36%) was up about 15.4%.

So what

There are two stories here, one for the stocks that went up and one for Lordstown. We'll get to Lordstown in a moment.

For the stocks that went up, I think the moves we've seen this week are a continuation of the movement back into meme stocks, possibly a result of investors moving out of the larger cryptocurrencies that have slumped in value recently. 

As I said last week, there may also be some short-squeeze effects at work. When a stock in which many traders have taken short positions makes a sharp upward move, the short-sellers will sometimes rush to close out (or cover) their positions by buying the stock, adding to the pressure that is driving the stock's price upward. 

A white Lucid Air, a sleek electric luxury-sports sedan.

Churchill Capital IV's merger with Lucid Motors is expected to close before the end of June, after which the stock will trade as Lucid Motors under the ticker "LCID." Lucid's Air luxury sedan will go into production later this year. Image source: Lucid Motors.

Earlier this year, we learned that some members of Reddit's WallStreetBets group have engaged in coordinated buying of out-of-the-money call options on heavily shorted stocks as a way to initiate or fuel short squeezes. A call option gives the owner the right to buy shares at a set price for a specific period; when a dealer sells a call option at a price above the stock's current level, the dealer will typically hedge the transaction by buying shares of the stock. An individual investor who buys such call options has more leverage -- in the sense of applying upward pressure to the stock price -- than an investor who spends the same amount of money buying shares. 

Given that quite a few electric vehicle stocks were among the Reddit group's favorites last winter, it seems very possible that these are the forces that pushed them up this week.

But as I said, Lordstown has been the exception. There's a good reason for that. 

Now what

Lordstown's stock price is down for good reasons, and frankly I'm surprised that it hasn't fallen further. In a regulatory filing this past week, Lordstown's auditors disclosed that there is "substantial doubt" about the company's ability to continue as a going concern for longer than another year. 

A blue-gray Lordstown Endurance, an electric pickup truck.

Lordstown's Endurance, an electric pickup designed for commercial fleets, was expected to go into production this fall. But now, when -- or whether -- the Endurance will get built is an open question. Image source: Lordstown Motors.

That disclosure, known as a "going-concern" notice, is a big deal. In this case it points to the fact that Lordstown doesn't think it has enough cash to put its first product, an electric pickup called the Endurance, into full production. There may be more to the story: It's possible, for instance, that the reveal of Ford Motor Company's (F -1.28%) electric F-150 Lightning last month led some potential commercial-fleet customers to cancel preorders for the Endurance; if Lordstown was counting on cash flow from early deliveries to ramp up production, a lack of big orders could be a major problem.

The company says it's working on getting additional financing. But right now, it looks grim -- and that's why the stock price was down in what was otherwise a good week for electric vehicle stocks in general.