Stocks of EV Trade Mostly Lower Following Fisker's Bankruptcy

On Tuesday, shares of electric vehicle (EV) manufacturers generally trended lower, influenced by the bankruptcy of Fisker Inc. Although not entirely unexpected, the bankruptcy still sent ripples through the industry.

‍

Fisker’s stock, marked by the symbol FSRN, dropped dramatically by 57.2% in morning trading following the bankruptcy announcement. The company indicated that its manufacturing halt would persist as it seeks to liquidate its assets.

‍

Tesla Inc., a prominent player in the EV market, saw its shares decline by 1.5%. This dip followed a significant 5.3% surge on Monday. Contributing to the pressure on Tesla’s stock was unfavorable data emerging from China.

‍

In the first quarter, Tesla, headquartered in Texas, generated $4.6 billion in revenue from China, accounting for roughly 22% of its total revenue. Additionally, the company held $2.76 billion in long-term assets in China, representing 7.5% of its total assets.

‍

Recent data from China indicated that while overall auto exports in May rose by about 30% compared to the previous year, exports of new-energy vehicles (NEVs) declined by 9.1%, marking the steepest drop in recent years, as noted in a J.P. Morgan research report. Tesla was also affected by this downturn.

‍

This decline in NEV exports from China followed significant announcements: in May, the U.S. imposed substantial tariff increases on EVs from China, and last week, the European Commission announced an investigation into Chinese EV exports.

‍

The new tariffs have raised concerns about a further slowdown in Chinese exports and heightened competition within China itself, according to J.P. Morgan analyst Akira Kishimoto.

‍

"Given the sluggish domestic demand, we must be aware of the risk that the supply-demand balance in the Chinese market could deteriorate further, intensifying price competition," Kishimoto advised in a note to clients.

‍

The Global X Autonomous & Electric Vehicles ETF, trading under the ticker DRIV, fell by 0.3%.

‍

In other developments, Rivian Automotive Inc.’s stock, represented by RIVN, dropped by 1.1% after gaining 0.7% on Monday, which had ended a four-day losing streak.

‍

Nikola Corp., symbol NKLA, continued its trend of closing below $1 since April 10, with its shares dipping by 0.7%.

‍

Mullen Automotive Inc. saw its stock, MULN, defy the trend of its peers by inching up 0.4%. The company has conducted three reverse stock splits in the past 13 months, effectively increasing the stock price by 22,500%.

‍

Both Nikola and Mullen have expressed “substantial doubt” about their ability to continue as viable businesses in their latest quarterly reports.

‍

Among Chinese EV manufacturers, Nio Inc. (NIO) saw its shares slip by 0.2%, XPeng Inc. (XPEV) gained 0.5%, and Li Auto Inc. (LI) saw a decrease of 1.1%.

‍

U.S.-listed shares of BYD Co. Ltd., trading under BYDDY, rose by 1.1%, approaching a seven-month high.

‍