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Investing.com — Chinese new energy vehicle stocks followed overnight declines Thursday among their U.S. peers, particularly Tesla, following reports that U.S. electric car maker Rivian is on the brink of bankruptcy. It fell.
shares of Spen (NYSE:) Inc (HK:) and NIO Inc (HK:) each fell more than 4% in Hong Kong trading, lagging the broader index's 0.2% decline.Battery inventory Contemporary Amperex Technology (SZ:) and Tianqi Lithium Co-op (HK:) each fell about 0.3%.
Rivian bankruptcy report, Tesla downgrade worsens sentiment towards EV market
The decline in NEV stocks is due to US EV manufacturers Rivian Automotive Inc (NASDAQ:) had hired advisors for a possible bankruptcy filing as it grappled with production delays and weak sales following the poor reception of its SUV Ocean.
Following the news, Rivian fell nearly 50% in aftermarket trading.
EV stocks also saw Tesla Inc. (NASDAQ:) suffer an overnight loss after the world's most valuable EV maker was downgraded to an underweight (equivalent to sell) rating by Wells Fargo. sentiment worsened.
Tesla fell 4.5%, and Wells Fargo also lowered its price target on the stock, indicating a 30% downside risk from current levels. The brokerage said it sees increased risks to sales volumes and said the impact of automakers' aggressive price cuts on sales is decreasing.
Tesla's downgrade underscores growing headwinds for EV makers, particularly declining sales as consumers lose interest in the sector. The premium price attached to EVs was a key driver of this trend, especially as high interest rates over the past two years have weighed on consumer spending.
BYD and Li Auto avoid losses with China's strength
BYD Co (Hong Kong:) shares and lee auto Inc (HK:)o avoided a broader decline in EV stocks, especially as recent data suggested sales in China remained strong.
BYD widens its sales lead over Tesla, making Li Auto (NASDAQ:) China's third-best-selling NEV maker, according to insurance registration data released earlier this week.
China remains the lone bright spot in the global EV market, with consumer demand remaining relatively strong thanks to high government subsidies and falling domestic EV prices.
