The last few quarters have been challenging for EV stocks. This, however, does not come as a surprise. Whenever an industry has a robust growth outlook, there is a big influx of new players. As competition intensifies, several companies go bust. The ones that survive are positioned to be among the market leaders. A similar scenario is panning out for electric vehicle companies in the current bear market.

While the long-term growth outlook is bright, the EV space seems overcrowded. As Polestar Automotive’s (NASDAQ:PSNY) CEO pointed out in September 2022 that “with just 1.5 percent of the vehicles on the road being electric today, it is clear we are living in an EV bubble, not an EV boom.”

Several EV companies have gained significant market share and have ample cash buffers to invest in innovation. Others are still at an early growth stage, with cash burn remaining a major concern. This column talks about EV stocks that have plunged and might remain depressed as survival chances diminish amidst competition.

Electrameccanica Vehicles (SOLO)

Electrameccanica Vehicles (NASDAQ:SOLO) stock touched a high of $10.8 in November 2020. The stock has plunged in over 24 months to one dollar. Even after the deep correction, I remain bearish on the SOLO stock as the business outlook is not encouraging.

Electrameccanica Vehicles entered the market with two differentiating factors. First, the company launched a single-seater EV. Furthermore, the base price of the vehicle was attractive at $18,500.

However, these factors have failed to attract consumers, and deliveries remain weak. Given the level of competition and the company’s limited finances, survival is likely to be a challenge. Limited financial flexibility also implies that the company will be restricted when it comes to investing in innovation.

For Q3 2022, the company sold 64 SOLO vehicles and generated revenue of $1.44 million. On a year-on-year basis, operating level losses have continued to widen. While Electrameccanica has $173 million in working capital, I don’t see sales gaining traction.

Arrival (ARVL)

When Arrival (NASDAQ:ARVL) was listed after a SPAC business combination, I was optimistic considering the business model. ARVL stock surged to highs of $36.2 in July 2020. The sell-off has been unabated, with the stock currently trading at 46 cents. I see minimal hopes for Arrival surviving in the crowded EV space.

As an overview, Arrival came with the concept of microfactories where the company’s electric delivery vans and buses would be built. The idea was to create several microfactories with a relatively small capital expenditure. It’s just the opposite of Tesla’s (NASDAQ:TSLA) gigafactory model.

Investors have, however, been disappointed with continued delays and sustained cash burn. Arrival has guided for cash and equivalents of $160 to $200 million at the end of 2022. This is likely to be sufficient to fund operations through Q3 2023.

With the stock below one dollar, raising funds might imply a significant dilution of equity. More importantly, there needs to be visible progress in terms of the delivery of vans and buses from the microfactories.

Mullen Automotive (MULN)

Mullen Automotive (NASDAQ:MULN) stock is another name among EV stocks to avoid. In the last 12 months, MULN stock has plummeted by 90%. While there has been news related to deals or partnerships, investors have been unimpressed. It seems unlikely that Mullen will survive in the coming years.

Last month, Mullen announced that the company had received an order for 6,000 Class 1 EV cargo vans from Randy Marion Isuzu. The order is expected to be worth $200 million.

In other news, Mullen has partnered with Loop Global to “build the next generation of public and private EV charging technology, infrastructure and network solutions.”

Mullen has also been working on solid-state battery technology, and initial test results have been encouraging. While all this sounds good, the market continues to punish the stock.

The key reasons include a lack of financial flexibility and uncertainty related to partnerships translating into substantial growth. Additionally, Mullen seems to be putting its hands into everything when it makes more sense to remain focused. Particularly as an early-stage company.

On the date of publication, Faisal Humayun did not hold (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.