Why Tesla, Rivian, and Lucid Stocks All Tanked Today
A couple of different news items were putting pressure on Tesla (NASDAQ: TSLA) shares Monday. But other electric vehicle (EV) manufacturers were also losing ground, among them Rivian Automotive (NASDAQ: RIVN) and Lucid Group (NASDAQ: LCID). As of 12:10 p.m. ET, Tesla was down by 6.2%, while Rivian and Lucid were off by 6.4% and 6.1%, respectively.
These EV stocks were dropping as the technology-laden Nasdaq Composite index was leading overall markets lower. At that point in the session, it was down nearly 2%. It's not surprising to see these names experiencing sharper moves than the index, as they are all counting on future growth to justify their current valuations. The environment for tech and growth stocks is unsettled as it remains unclear how the economy will fare amid the Federal Reserve's moves to quell inflation.
Tesla faces its own company-specific challenges, however. One headwind that could directly impact its business is China's fight to prevent another surge of COVID-19 infections. Tesla's second-quarter production and delivery numbers, which were released last week, showed how much production was lost from its Shanghai plant due to that city being locked down in April and May. The plant came back strong in June with its highest vehicle production month ever. But on Monday, China announced a new shutdown in Macao -- the casino hub is closing its businesses for a week. Other Chinese cities have also implemented new restrictions to combat a rise in new cases. And Shanghai will conduct another round of mass testing after a person there was found to have a new, highly transmissible omicron subvariant.
Source Fool.com
