The auto industry is massive and is very visible today. Everyone is aware of the several auto brands and their transition into Electric vehicle markets. Due to this visibility and growing awareness, auto stocks have enjoyed a lot of attention from investors in the past.

However, all stocks are not worth your time and money. The auto industry is changing and in the current economic situation, it is advisable to sell auto stocks that do not have the potential to perform in the near term.

Let’s take a look at the three auto stocks to sell right away. 

Tesla (TSLA)

One of the top automakers in the industry, Tesla (NASDAQ:TSLA) has been ruling the EV segment for a while now. However, I have never been a fan of it and do not think it is a good stock for your portfolio.

It already looks like it is the beginning of an end for TSLA stock. It is down 33% year to date and will continue to trend lower in the near term. If you have not yet sold the stock, it isn’t too late to dump it now. The stock was trading well over $1,000 in April and looked overvalued at that time. However, it is down to $744 today but still not worth owning.

Tesla’s crown could be coming off soon. Its deliveries fell this quarter, reporting a break in its two-year streak. The recent decline could be due to the issues affecting all EV companies like the China lockdown and supply chain constraints but the company’s performance isn’t looking promising either.

There was a time when Tesla had very little competition but with emerging EV makers, Tesla has many competitors to handle. That said, the company is no longer a leader in EV sales and its delivery numbers are proof that something is not right. 

Tesla stock split is scheduled for Aug. 4 and this is when you will see a price drop. If you intend to own the stock, you can buy it after the split, when it is much more affordable.

The current macroeconomic conditions and the overall sentiment around the market will lead to a downward trend in TSLA stock. Elon Musk’s Twitter (NYSE:TWTR) deal hasn’t done any good to the stock and it was down 6% after the deal was called off.

Workhorse (WKHS)

There isn’t just one reason to avoid Workhorse (NASDAQ:WKHS) but many. Workhorse’s downfall began after a probe from the U.S. Department of Justice. In November last year, there were concerns around fraud allegations and regulators started to look into the company.

That said, there were allegations of malfunctioning prototypes, and massive recalls that ruined the position of the company in the market.

What followed was worse. It lost crucial contracts and reported a loss of $22.1 million in the recent quarter. This set a wrong example for the company and proved that their tech platform needs a lot of rework.

WKHS stock does not have specific advantages in the industry and if it fails, it fails. Raising cash will not be easy in the current environment and it does not have adequate liquidity to continue with production. 

The auto market is highly competitive and even a small mistake will cost millions. Workhorse has a high cash burn rate of $35 million and holds only $167 million in cash. This is not an ideal situation and could pose a lot of trouble in the long term. WKHS stock is down 28% in the past six months and is trading in the penny stocks segment today at $2.79.

With a market cap of $456 million and a 97% drop in revenue in the recent quarter, WKHS stock has ample space to tumble. 

Auto Stocks to Sell: Lordstown Motors (RIDE)

I have never been fond of Lordstown Motors (NASDAQ:RIDE) and wasn’t convinced that it could beat some of the top players in the industry.

There was a time when RIDE stock was trading at over $27 a share and it is trading in the penny stock segment today, close to $2.25 a share and it could become a very speculative stock in the near term. The management has recently sold the Ohio manufacturing plant and generated $260 million in cash.

However, there is not enough cash to last long. It has only been able to avoid bankruptcy for now but the future remains highly uncertain. There is immense pressure on automakers currently and Lordstown Motors isn’t in a good place in the market. 

While the company might be able to continue with the production of the Endurance pick-up truck, it will still need capital to complete the production and market its products. It hasn’t had an easy time raising money for business operations.

By the time the company raises cash and begins production and marketing activities in full swing, it might be too late for the party. RIDE stock is down 39% in the past six months. There is not much to look forward to with RIDE stock and it is best to get rid of it at the earliest. 

On the date of publication, Vandita Jadeja did not have (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.