The electric vehicle flop accelerated last October 2023 when investors anticipated that Fisker (FSR) would run out of money. Disposable income is sharply lower.
Perceptive consumers are ignoring the official U.S. CPI (inflation) reports and shunning big purchases. In response, leading EV manufacturers like Tesla (TSLA) cut prices. Competing EV firms like Rivian (RIVN) and Polestar (PSNY) will report higher losses as a result.
The price war and low demand for EVs have far-reaching effects in the Far East. China’s EV firms are now in free fall. Li Auto (LI) punished shareholders who bought the stock at above $40 only weeks ago. The firm cut its first-quarter delivery target. It now expects to deliver only 76,000 to 78,000 vehicles. This is below previously issued the 100,000 to 103,000 vehicle forecast.
XPeng (XPEV) reported a 28-cent per share loss. Gross margin fell from 8.7% last year to 6.2%. Given total deliveries rose by 171% Y/Y to 60,158 vehicles, economies of scale are not achievable.
Nio (NIO) tried to distract investors by announcing an aim to produce longer-life EV batteries through its partnership with CATL. The firm issued a Q1 sales guidance of between 31,000 – 33,000 units. Revenue will change in the range of negative 1.7% to positive 3.8%. Like the other EV firms mentioned, NIO stock has high risks. Expect this stock to trade at fresh new lows in the coming days.
