Chijet stock price forecast: learn from Mullen and avoid CJET

Chijet (NASDAQ: CJET) stock price has done well in the past few days after the company’s combination with Jupiter Wellness. The stock rocketed up by more than 50% on Monday and hit its all-time high of $8.36. It is a relatively small electric vehicle company with a market cap of just $50 million.

CJET stock is not worth your time

China is the biggest market for electric vehicles. As a result, the country has the most EV manufacturers, with over 90 companies in the industry. Some companies like BYD, Li Auto, Xpeng, and Nio are already building and selling thousands of vehicles every quarter.

At the same time, there are now signs that the industry is going through a slowdown. As I wrote here last week, companies like Xpeng and Nio delivered fewer cars than expected in May. Most of the Chinese EV stocks have also tumbled in the past few months.

As with all other industries, most companies in the Chinese EV sector will not make it. One of those I am pessimistic about is known as Chijet, which recently went public in the US. The company is pre-revenue and is building a car known as FB77, which it expects to launch in the next few years. It is also building R9, a hybrid sports utility vehicle (SUV) and other companies.

History shows that many pre-revenue EV companies are struggling as the cost of R&D and manufacturing is substantially high. I just published articles on Mullen Automotive and Canoo, which you can read about here and here.

These companies show that building running an EV takes millions or even billions of dollars. I don’t believe that Chijet has these funds. Worse, the company’s operations are in China, a country where EVs are getting crowded.

Chijet stock price forecast

The Chijet stock price has more than doubled in the past few days. This performance is mostly because of the company’s partnership with FAW, one of the biggest Chinese auto companies.

However, the company’s claims are still hard to justify since it has not yet filed any documents with the SEC. This makes it a highly risky company to invest in for now. Also, I believe that the firm will go through the same challenges that other EV startups, including Rivian and Lucid Motors have gone through. Therefore, I suspect that the stock will crash below $5 soon as the listing momentum fades.