Clean tech valuations are wildly out of sync with company profit

Investors bullish on the green transition have sent clean-energy stocks to unprecedented levels. But behind the skyrocketing valuations of electric-vehicle and battery makers is a sobering reality: companies hemorrhaging money.

The Wildherhill Clean Energy Index, which tracks the clean-energy sector, has seen its value surge more than 300% to $1.3 trillion during the past year. Its 56 member companies posted combined net losses of $6.4 million in the 12 months ending in September 2020, according to data compiled by Bloomberg.

Even the 10 companies with the least revenue have a combined market value of around $22 billion. Four of them -- Lordstown Motors Corp., Lithium Americas Corp., Fisker Inc. and Ayro Inc. -- posted no revenue at all in recent years.

Of course, revenue isn’t the only gauge of a company’s viability, and optimists would say these valuations are a reflection not of a company’s current fundamentals but of how much it stands to gain as President Joe Biden embarks on an precedented climate push.

Yet the trend recalls another era of breakneck technological advancement: the dot-com bubble, when scores of super-valued companies with little or not profit went bankrupt, leaving everyday investors holding the bag.