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Tesla delivery decline rustles whole EV sector – Crypto News

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2 years ago

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  • NIO stock has sunk to a near four-year low near $4.50.
  • Tesla upended the EV market with declining deliveries in Q1.
  • Rivian beat consensus for deliveries in Q1 but saw its stock price descend.
  • Strong US manufacturing data is pressuring equities.

 

Nio (NIO) stock sank to its lowest level in nearly four years on Tuesday after Tesla (TSLA) announced its first decline in deliveries since 2020.  Despite a decent showing in its own March delivery data on Monday, sentiment surrounding the Chinese electric vehicle (EV) automaker has dwindled. 

It didn’t help that US manufacturing data from Monday continues to put downward pressure on the market as investors postpone their estimate of the beginning of the Federal Reserve’s (Fed) interest rate cuts. The Dow Jones lost 1%, while the S&P 500 dropped 0.72% and the NASDAQ Composite was reduced by 0.95%.

Nio stock news

Nio stock fell nearly 3% on Tuesday’s news that Tesla had missed consensus delivery estimates for the first quarter. Elon Musk’s company delivered 386,810 vehicles during the first quarter, a figure that was well below Wall Street’s expectations for 425,000.

Additionally, the final tally arrived well off the 484,507 vehicle deliveries in the previous quarter or the 422,875 delivered a year prior. Tesla stock drained more than 5% on the quarter’s figures, which they partially blamed on the Israel-Gaza war’s effect on increasing Red Sea shipping costs and the arson attack on its factory in Berlin. 

Rivian (RIVN), another EV upstart, also released its delivery figures on Tuesday. The company, run by RJ Scaringe and coming off a poor earnings call several weeks back, posted deliveries of 13,588 that bested consensus by about 1,700. However, that was not enough to aid the share price, and Rivian stock descended a similar 5% or more in the session.

Regardless of delivery data, much of the market is in risk-off mode due to a hot manufacturing report. March’s ISM Manufacturing PMI data arrived at 50.3 on Monday, a large jump from February figures and the first time in 16 months that the sector showed expansion. The stronger data gave more credence to the idea that the US economy was too hot for the Fed to lower rates. Currently, the market is betting on a first rate cut in June.

For its part, Nio delivered 11,866 vehicles in March, which amounted to a 14% increase YoY. As has been the case for some time, SUV deliveries surpassed sedan deliveries. Nio has been competing with fellow EV makers like BYD (BYDDY) and Li Auto (LI) to cut prices on their models over the past few months, but on Monday Tesla surprised some observers by raising prices in both the US and China on select models.

 

EV stocks FAQs

Electric vehicles or EVs are automobiles that use rechargable batteries and electric motors to accelerate rather than internal combustion engines (ICEs). They have been around for more that 100 years, but battery technology research & development was meager for much of the 20th century. Lithium-ion battery technology became advanced enough to produce EVs at scale in the late 1990s and 2000s, and sales have been steadily increasing since then Tesla’s Roadster was unveiled in 2008. EVs are viewed as a means of reducing carbon emissions since battery electric vehicles (BEVs) themselves produce zero emissions. Other vehicles called plug-in hybrid electric vehicles (PHEVs) utilize both battery electric power and ICEs as a backup.

EVs are growing from a small base, but they rose from 9% of global new auto sales in 2021 to 14% of the total in 2022. This was a 65% YoY growth rate, and the industry delivered 10.2 million EVs worldwide in 2022. Projections show this number climbing above 16 million in 2023. Across the world, market shares differ greatly among nations. Nearly 88% of Norwegian new car sales in 2022 were EVs. On the other hand, the United States, where much of the modern innovation in EVs was forged, had less than 8% of new vehicle sales go to EVs in 2022. The largest EV market in the world, China, saw 30% of the market go to EVs that year.

We know you’re thinking Elon Musk, but he’s probably more like the father of the mass-market, contemporary EV. All the way back in 1827, a Hungarian priest named Anyos Jedlik invented the electric motor and used it the following year to power a vehicle of sorts. French scientist Gaston Planté invented the lead-acid battery in 1859, and German engineer Andreas Flocken built the first true electric car for the public in 1888. EVs made up about 38% of all vehicles sold in the US around 1900. They began losing market share rapidly after 1910 when gasoline-powered vehicles grew much more affordable. They largely died off until new research programs in the 1990s led to gradual private sector investment in the 2000s.

China’s BYD is by far the largest manufacturer of EVs in the world. In 2022 it sold 1.8 million EVs and in the second half of the year made up 20% of the global market. The asterisk given to BYD is that the vast majority of these vehicles are hybrids. Tesla’s 12% market share is often treated as more significant than BYD, because it only sells BEVs and is the most famous EV brand in the world. Volkswagen, BMW and Wuling then round out the top five. As a new sector with heavy investment though, many startups have flooded the market. These include China’s Nio, Li Auto and Xpeng; a Swedish-Chinese manufacturer called Polestar; and Lucid and Rivian from the US.

Nio stock forecast

Nio stock reached an intraday low of $4.38 on Tuesday, although the stock ended the day at $4.54. This was the lowest that NIO stock has traded since June 3, 2020, almost four years ago.

Nio shares are trading well below both the 20-day and 50-day Simple Moving Averages (SMA), and the stock price has been in a downtrend for much of the past two years. Based on technicals, traders won’t pay Nio any attention until it closes above the $5.30 level. That price level has shown support back in February and also coincides with the 20-day SMA.

NIO daily stock chart

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