Why Tesla, Rivian, and Nikola Stocks Crashed Today
The market isn't taking any prisoners right now, but there are especially interesting things happening in the more speculative electric vehicle (EV) sector. It's not just start-up companies with little to no revenue getting hit, with the stock of market leader Tesla (NASDAQ: TSLA) down more than 25% from January highs. This morning, shares of Tesla, Rivian Automotive (NASDAQ: RIVN), and zero-emission semitruck maker Nikola (NASDAQ: NKLA) are all experiencing much steeper drops than the technology-filled Nasdaq Composite index. As of 11:12 a.m. ET, Tesla stock was down 6.6%, having recovered from a previous 10% drop. Rivian shares were near the day's low of 10.1%, and Nikola was down 7%.
Much of Tesla's high valuation has come based on expectations from future earnings. With prospects of inflation and rising interest rates, investors are now less willing to pay higher prices for many growth stocks like Tesla. That mentality is magnified even more with names like Rivian and Nikola for which commercial sales have just begun and operational risks are even higher.
Image source: Tesla.
Source Fool.com
