Why Tesla, Nio, and Lucid All Sank Today
What happened
Shares of electric-vehicle (EV) stocks were sinking today after a new report showed that Tesla's (NASDAQ: TSLA) vehicle deliveries in China tumbled 64% in July. Nio (NYSE: NIO) -- which is based in China -- may be reacting negatively to that news, along with new data that showed the company continues to lag behind its rival in China.
Additionally, Lucid Group (NASDAQ: LCID) may be losing some ground after Ford announced today that it's raising the price of its F-150 Lightning pickup truck due to rising material costs.
In the nascent EV industry, any dramatic news for one automaker can often affect the share price of other automotive companies, which appears to be the case today. As a result, Tesla was down 2.2%, Nio had fallen 4.6%, and Lucid was down 6.6% at the end of the trading day.
So what
News data released today by the China Passenger Car Association (CPCA) showed that Tesla's July vehicle deliveries were 28,217, down significantly from 77,938 in June.
Image source: Getty Images.
While the CPCA didn't mention why Tesla's China sales fell, Tesla had been working on upgrading the plant during the month in order to boost production, according to Bloomberg. This could eventually help production increase by 33%. That didn't seem to appease Tesla investors though, who aren't ready to hear about any production delays in China after they'd seen lengthy shutdowns of Tesla's Shanghai factory due to China's strict zero-Covid policy.
Nio investors appeared a bit jittery about the news, as well, but they may have been focusing on other CPCA data showing that rival BYD remains the uncontested EV leader in the country. BYD delivered 163,042 cars in July, while Nio delivered just 10,052.
Finally, Lucid's shares were likely reacting to the fact that Ford raised the price for its all-electric F-150 Lightning because of "significant material cost increases and other factors." The price bump means that customers will pay between $6,000 to $8,500 more for the truck, depending on the model.
Lucid investors are already on edge right now after the company had to raise its own vehicle prices beginning in June due to rising costs. Additionally, just last week, the company slashed its production guidance for the full year. Lucid now estimates it will produce between 6,000 to 7,000 vehicles this year, down from the previous guidance range of 12,000 to 14,000.
With another EV maker raising its prices, Lucid investors are likely taking this as a cue that the broader EV industry is feeling the effects of rising inflation and higher material costs.
Now what
EV investors have been on a rollercoaster ride lately after the Senate passed the Inflation Reduction Act. The new bill, which could be passed by the House and signed by President Biden as early as this week, provides expanded tax credits for both new and used EV purchases.
While that news gave some EV stocks a temporary lift, today's drop shows just how volatile these stocks are right now as investors try to assess the impact of inflation and rising material costs for the industry. All of this means that Tesla, Nio, and Lucid investors can likely expect more share-price swings in the near term.
10 stocks we like better than Tesla
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Tesla wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of July 27, 2022
Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends BYD, Nio Inc., and Tesla. The Motley Fool has a disclosure policy.
