Higher competition is clearly brewing in the automotive sector, which has been creating an urgency for EV stocks. Tesla (NASDAQ:TSLA) reached its recent trough when the electric vehicle leader suffered from noticeably weaker unit sales in Dec. 2022. The company also slashed prices so that customers could qualify for a tax credit break. Indeed, at its bottom, TSLA stock looked like it would fall below $100. Fortunately, few bears dared to bet against it, with the company’s short interest as a percentage of its float sitting below 4% at the time of writing.

It appears Tesla bears did not account for the positive impact of these price cuts. With more EV buyers incited to buy Teslas, this competitive environment may prove to be a big negative for some of the company’s peers. Thus, this renewed interest in the biggest EV supplier in North America is bad news for three imposter EV stocks.

Despite input and development costs rising, competitors must cut prices. They cannot afford to lose marketing momentum as they fight for market share.

With that said, here are three EV stocks I think are hard sells, considering the likelihood that Tesla will win the price war.

Lucid (LCID)

Lucid (NASDAQ:LCID) traded as low as around $6.50 at its bottom. However, a massive short squeeze occurred on Jan. 27, 2023, which briefly propelled the stock to around $18.00, before it fell back to earth. Rumors circulated that Saudi Arabia’s Public Investment Fund (or PIF) would take the firm private.

Details of such a buyout are sketchy at best. Logically, PIF does not need to buy out investors at a vastly higher stock price to save the company. It only needs to supply the luxury automotive firm with emergency cash, if Lucid needs it.

Lucid reportedly did everything it could to reverse order cancellations. Barron’s reported that Lucid offered an up to 10% discount on the Grand Touring model. This model starts at $138,000 and required only $1,000 to reserve.

Increasing layoffs in the tech sector and other high-paying markets will hurt the consumer. Potential buyers might cancel their orders because they can no longer afford the vehicle. That’s the kind of headwind that’s likely to drag this stock lower over time.

Polestar Automotive (PSNY)

Polestar Automotive (NASDAQ:PSNY) is a Swedish firm established in 1996 by Volvo Cars’ partner Flash/Polestar Racing. Interestingly, over the past month, PSNY stock has trended higher. This surge appears to be a result of an impressive milestone hit by the company, with 100,000 vehicles produced by Polestar.

To increase brand and product awareness, Polestar opened a retail location in Florida. Visitors may also look at the new Polestar 3 in augmented reality.

That said, neither of Polestar’s models have inspiring designs. This is an EV stock I think is a sell simply because customers are likely to opt for the Polestar 3. Available starting Feb. 2, customers can receive updated safety features, advanced ultrasonic sensors, and more cameras. Thus, a shift in consumer demand toward this lower-priced model may hurt the company’s margins and also result in a surge in inventory of the Polestar 2.

Tesla’s price cut intensifies competition for the inexpensive Polestar. The company will need to sell more units at lower prices to achieve economies of scale. That’s not good for investors in this up-and-coming EV player.

Rivian Automotive (RIVN)

Last on this list of EV stocks to sell is Rivian Automotive (NASDAQ:RIVN), a company which not only produced its own set of headwinds for investors, but dented the earnings of both Amazon (NASDAQ:AMZN) and Ford Motor (NYSE:F). The two early investors took billions of dollars in write-down after RIVN stock fell. Chances are low that they will buy out Rivian in the future.

That’s because in addition to the buyout premium unwinding, shareholders have to contend with slower growth. To make up for lower revenues generated as a result of the price war, Rivian must cut costs, eliminating 6% of its staff. This should allow Rivian to reallocate its resources to ramp up vehicle production. That said, before Tesla cut prices, Rivian could charge customers at higher price points. Thus, Rivian is now in a position where it could lose money while scaling production.

To achieve profitability sooner, the company needs to reduce its cash burn rate. Given that the EV market is more competitive than ever, I just don’t see how Rivian can take on Tesla head-on amid this price war right now.

On the date of publication, Chris Lau 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.