© Reuters.
biedexmarkets.com– Chinese new energy vehicle stocks sank on Thursday, tracking overnight declines in their U.S. peers, particularly Tesla Inc, following a report that U.S. electric vehicle maker Rivian was facing bankruptcy.
Shares of Xpeng (NYSE:) Inc (HK:) and NIO Inc (HK:) slid more than 4% each in Hong Kong trade, underperforming a 0.2% decline in the broader index. Battery stocks Contemporary Amperex Technology (SZ:) and Tianqi Lithium Corp (HK:) fell about 0.3% each.
Rivian bankruptcy report, Tesla downgrade dent EV sentiment
Losses in NEV stocks came after a report showed that U.S. EV maker Rivian Automotive Inc (NASDAQ:) had hired advisers for a potential bankruptcy filing, as the firm grappled with production delays, as well as slowing sales following a negative reception for its Ocean SUV.
Rivian slid nearly 50% in aftermarket trade following the report.
Also denting sentiment towards EV stocks were overnight losses in Tesla Inc (NASDAQ:), after the world’s most valuable EV maker was downgraded to an underweight (equivalent to sell) rating by Wells Fargo.
Tesla slide 4.5%, with Wells Fargo also slashing its price target on the stock to indicate a 30% downside risk from current levels. The brokerage said that it saw increased risks to sales volumes, and that the carmaker’s aggressive price cuts were having a diminishing impact on its sales.
Tesla’s downgrade highlighted the mounting headwinds for EV makers, particularly from declining sales as consumer interest in the sector dwindled. The premium price tags associated with EVs was a key factor in this trend, especially as high interest rates dented consumer spending over the past two years.
BYD, Li Auto duck losses on China strength
Shares of BYD Co (HK:) and Li Auto Inc (HK:)o dodged broader weakness in EV stocks, especially as recent data suggested that their sales in China remained robust.
Insurance registration data released earlier this week showed that BYD widened its sales lead over Tesla, while Li Auto (NASDAQ:) became the third-highest selling NEV maker in China.
China has remained a sole bright spot in the global EV market, with consumer demand remaining relatively strong thanks to high government subsidies and shrinking EV prices in the country.
