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EV stocks under pressure 📉

16:17 19 October 2023

⚡ Tesla's weak results and Musk's comments put pressure on EV companies

Markets on Wall Street are trading at mixed levels, and investors' attention during today's session is primarily focused on Tesla's (TSLA.US) quarterly results, which did not perform well. For the first time since 2019, the company disappointed negatively in terms of EPS and revenue measures. 

Selected company results:

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  • Revenue: $23.4 billion vs. forecast of $24.06 billion 
  • Earnings per share (EPS) $0.66 vs. forecast $0.74
  • Free cash flow: $848 million vs. forecast $2.59 billion 
  • Research and development (R&D) expenses: $1.16 billion vs. $733 million in Q3 2022

Musk sees the macro environment largely affecting consumers and he is concerned that demand for cars may decrease and suggested that the company will continue its policy of reducing costs and car prices to make them more affordable to buy. In addition, at a press conference with investors following the release of quarterly results, Tesla CEO Elon said that due to weak demand for EVs from US customers, the decision to build a new factory in Mexico has been put on hold.

Some of the more active electric vehicle manufacturer stocks include: Nikola Corp. (NKLA.US), down 6.9% (5-week lows), Lucid Group Inc. (LCID.US), down 4.0% (record lows), Mullen Automotive Inc. (MULN.US) a drop of 23.1% (record lows), and Rivian Automotive Inc. (RIVN.US), which fell 3.7% to its lowest level in 3.5 months.

The companies with the greatest correlation to Tesla's stock price, i.e. other companies focused on the EV sector, are trading with sizable declines today. Tesla's shares alone are losing nearly 10% today. Source: xStation 5

The stock price of Tesla (TSLA.US) started today's session with a solid downward gap (breaking below the lower limit of the upward channel), after which the downward movement continues. Currently, the price is approaching the $210-$217 support zone, which follows previous price reactions. If it is negated, the repricing may take a turn for the worse. Source: xStation 5

 

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