This rise hasn’t gone unnoticed by short sellers (sophisticated investors who seek to profit from falling share prices). Right now, short sellers are betting against a number of EV stocks with the expectation that they’ll crash.

Here, I’m going to highlight three EV stocks that short sellers are currently targeting. Given the high level of short interest these stocks have, I’ll be avoiding them for now.

Lordstown Motors

Let’s start with Lordstown Motors (NASDAQ: RIDE), which specialises in pick-up trucks and work vehicles. At present, around 39.1m Lordstown shares are being shorted, which equates to short interest of 35%.

It’s not hard to see why the short sellers are targeting Lordstown. For starters, this company has experienced a number of delays getting to production. Recently, it pushed its production timeline out again. It now expects commercial production of its Endurance pick-up truck to start in the third quarter of 2022, as opposed to the second quarter.

Secondly, the company is under investigation from the US Securities and Exchange Commission (SEC) in relation to its deal to go public.

It’s worth pointing out there has been some positive news in relation to Lordstown recently. Earlier this month, the group sold its Ohio factory to manufacturing giant Foxconn. The buyer also signed an agreement to help Lordstown manufacture its vehicles. 

Overall, however, there appears to be a lot of uncertainty here.

Nikola

Another EV stock that short sellers are betting against is Nikola Corp (NASDAQ: NKLA), which is developing a range of battery/electric semi-trucks. At present, around 70.7m NKLA shares are on loan, which equates to short interest of around 35%.

Like Lordstown, this company has also been investigated by the SEC. Earlier this month, Nikola said it was working with the US financial regulator to settle charges against founder Trevor Milton, who allegedly misled investors about the company’s technology and capabilities. It seems the company may be facing a fine of $125m. It’s worth noting that some of the claims against Nikola were originally unearthed by short seller Hindenburg Research, which published a scathing report on the company last year.

Nikola is currently trying to sue Tesla over the design of its electric truck. If it wins, it could receive billions in damages. This could improve its outlook. I’m not expecting Nikola to win though. One expert says Nikola’s claims against Tesla are ridiculous.

Fisker

A third EV stock with high short interest is Fisker (NYSE: FSR). It’s developing the Fisker Ocean, an all-electric SUV designed by Danish automotive designer Henrik Fisker, who designed Aston Martin’s DB9. At present, 59.8m shares are on loan here, which represents short interest of around 42%.

Fisker appears to have a good product. Its flagship model, which is set to go into production in 2022, has already received a lot of orders. It also has some big partnerships, including deals with Magna International and Foxconn.

What stands out here however, is the valuation. Currently, Fisker has a market-cap of around $6.3bn, despite the fact that it’s yet to produce a car. Clearly, the short sellers see this valuation as too high.

Given the high level of short interest here, I’ll also be avoiding this EV stock for now.

Life in the fast lane

With the charge towards electric vehicles (EVs) gathering pace, I think buying stocks involved in the building and the running of these low-carbon carriages is a great idea. Ford is the latest major motor manufacturer to make a major stand on the issue. It claims that all of its new vehicles sold in Europe will offer an all-electric or hybrid option by mid-2026. And by 2030, it reckons all of its cars will be electric only.

I believe Fisker (NYSE: FSR) is another great US share to buy to ride the green vehicle phenomenon. The carmaker claims that its Ocean­ vehicle will be “the world’s most sustainable vehicle” when it launches next year. Critically too, the company’s first mass-produced EV will be a sports utility vehicle (SUV). This is the fastest-growing segment of the new car market. And Statista predicts a staggering 51m SUVs will be sold in 2023, up from the 26.7m which rolled out of the world’s showrooms in 2023.

Fisker, of course, carries more risk than established carmakers which have long track records of building for the masses. The business is expected to remain loss-making over the next couple of years at least. And production problems could delay the US share turning a profit for years to come.

There’s also huge competition from electric-only manufacturers such as Tesla as well as from the huge investment that major industry players like Ford are making in EVs. There’s also the threat that hydrogen-powered vehicles could eventually overtake electric as the planet’s most popular version of these green machines.

A green UK share

Getting exposure to the EV market isn’t the only green theme I think could make stock investors big money in the future. The gradual move away from fossil fuels and towards greener forms of electricity provides Greencoat UK Wind (LSE: UKW) with terrific profits opportunities. As the name suggests, this UK share operates onshore and offshore wind farms across Britain.

2020 was a blockbuster year for green energy. For the first time in history, more electricity was generated from renewable sources than from coal, crude oil and natural gas, according to Drax Electric Insights. And it was a particularly big year for producers of wind power. Over the course of the 12 months, this renewable source accounted for a quarter of all of Britain’s power.

Though green energy demand is set to keep growing, it might not all be plain sailing for Greencoat UK Wind. The company could experience significant problems with the development of projects that could damage expected income and incur extra costs. That said, I still think this UK share is still a top ISA buy today.