When China electric vehicle firm Nio (NIO) posted results, the stock gained 27.4%. Unusually, Tesla (TSLA) joined the rally up until Thursday.
Nio’s 143.9% Y/Y increase in deliveries led to a 30-cent non-GAAP EPADS loss. It suggests that Chinese EV firms may flood the global market. Last Friday, TSLA stock closed at $210.73, down by 8.45%. Risks are on the rise that the market will turn its attention away from the Robo Taxi unveiling. Instead, it will worry about Tesla’s falling average selling price per unit and declining profit margins.
Europe, the U.S., and Canada slapped tariffs on Chinese EV exports. This includes Tesla vehicles made in China.
The negativity for EV stocks hurt the lithium mining market. Albemarle (ALB) fell by 10.61% in the last week. Until the stock chart reverses its yearlong downtrend, risks remain high. The company is a cyclical stock that will not find a bottom until lithium prices stop falling. Furthermore, miners need to cut back on capital expenditures and lower output.
Most importantly, governments slowed their support for EV subsidies and tax credits. Without that, consumers will buy a hybrid or gas-powered vehicle instead. When car companies buy fewer EV batteries, that hurts the lithium miners.
