Nikola, Lordstown shares drop in latest sign of turbulence for EV sector

Shares of Nikola Corp, hit by a key investor cutting its stake, and Lordstown Motors, targeted by a regulatory inquiry, slumped on Thursday in the latest sign of pressure for once high-flying electric-vehicle makers.

Nikola shares were down 3.5% in premarket trading while Lordstown was trading 4.8% lower, adding to declines of roughly 50% from their highs this year amid concern about the electric truck makers' ability to delivery on technology, as well as worries about rising yields and valuation.

Both are also part of the recent boom in special purpose acquisition companies, or SPACS, shell companies that use their IPO proceeds to take private firms public.

Nikola said on Wednesday that South Korea's Hanwha Corp has decided to sell up to half of its stake in the company.

Lordstown on Wednesday disclosed that it received a request for information from the US Securities and Exchange Commission regarding accusations by Hindenburg Research, a short seller that accused the electric truck startup of misleading consumers and investors.

Last week, Hindenburg accused Lordstown of using "fake" orders to raise capital and claimed that its upcoming truck was years away from production.

High-flying stocks like electric-car maker Tesla Inc , which powered the market's rebound from the pandemic lows in March last year, have been hit by rising yields and investors shifting funds to sectors poised to benefit from a recovery aided by accelerated rollouts of COVID-19 vaccines.

Tesla has seen its stock cool off by 22% from its 2021 high in January.

The broader auto industry has also been pressured by a global semiconductor chip shortage, which has caused a major delay in manufacturing activities and forced many companies to scale down production.