When Nasdaq topped after failing to break out between November 2021 to the first few days of January 2022, it set off a classic “double top.” Fear intensified as investors dumped tech stocks whenever the index rallied intraday.
Markets did not spare electric vehicle stocks. Nio (NIO) and XPeng (XPEV), which held up despite the China-stock sell-off, are now underperforming. Nio is at a one-year low. XPeng is performing relatively better because it has a more aggressive software update strategy. It may not have Nio’s battery charging network. Conversely, it did not forecast light EV unit sales as Nio did.
Tesla (TSLA) is the bell-weather stock in EV to watch. After failing to break out above $1200, investors sold the stock throughout most of the month. The market will fight to hold the $1 trillion market capitalization as long as it can.
Among the EV stocks, Lucid (LCID), Fisker (FSR), and Rivian (RIVN) have the highest risks. The firms have too few EV productions to add meaningfully to their bottom line. Investors are no longer waiting for those three firms to invest in capital expenditures. As losses mount every quarter, investors might avoid all three stocks. Those companies must get out of conceptual mass markets and scale to grow their market share.
