I wrote about Fisker (NYSE: FSR) stock on Wednesday and warned that the company was between a rock and a hard place. In that article, I explained that the chances of a bankruptcy were extremely high as the company continued to burn cash at an alarming rate. 

I also raised concerns about whether Nissan would make a $400 million investment as was reported a few weeks ago. It was later reported that Fisker had hired restructuring experts ahead of a potential bankruptcy filing.

This situation marks a major downfall for a company that was once valued at over $12 billion at the height of the EV bubble. If the bankruptcy happens, it will be the second time that a company founded by Henrik Fisker has gone burst.

Sadly, Fisker will likely not be the last EV company to file for bankruptcy protection. Besides, most Tesla wannabes are burning cash at an alarming rate at a time when capital has become highly expensive because of the actions of the Federal Reserve.

At the same time, the EV industry is going through a major meltdown that is affecting all companies. Tesla shares have lost over half of their value from their record highs. BYD, the biggest Chinese EV company, is also seeing slow growth, according to a report by WSJ. 

 I wrote that Li Auto was also struggling. Other companies like Rivian, Lucid Group, and VinFast are also going through major challenges.

Many EV companies are at risk of going bankrupt. This includes the likes of Mullen Automotive, Canoo, and Faraday Future. 

Faraday Future is at a higher risk now that the company has become a penny stock worth just $4.3 million. It has inadequate funds and has zero chance of raising cash by selling equity. The company also issued its first recall, which could suck more money in its balance sheet.

Mullen Automotive is another company that could come under strain even though the company has started selling its trucks. The challenge is that the firm is still burning loads of cash as it boosts its scale. Also, it is unclear whether there is strong demand of its trucks. This explains why the MULN stock price has crashed by 55% this year.

Canoo is another EV company that is at risk. While the company has a huge inventory, its balance sheet is stretched since it ended the last quarter with less than $10 million in cash and short-term investments.

More EV companies could file for bankruptcy in the next few months. Lucid Group is only surviving because it is mostly owned by Saudi Arabia, a country with unlimited funds.

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