Amid everything that happened over the weekend, it’s small wonder that electric vehicle stocks are undergoing much closer scrutiny lately. The recent news about OPEC cutting back will likely mean higher gas prices, and with businesses demanding more employees return to the office, the electric vehicle may have time to shine. However, given that many electric vehicle stocks are trading lower Monday afternoon, the connection may not be so cut-and-dried.
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Here’s the basic hypothesis: the OPEC cuts might ultimately produce oil over $100 per barrel, which would drive up interest in electric vehicles. Given that several electric vehicle companies such as Tesla (NASDAQ:TSLA), Nio (NASDAQ:NIO), and XPeng (NASDAQ:XPEV) all turned in growing numbers, that’s not so out of line. However, an increasingly shaky economy, and a declining willingness on banks’ part to lend, may limit the positive impact.
That’s not all, either. While Tesla made record deliveries, another development overshadows this: Tesla’s declining profit margins. Tesla already cut prices, and pretty aggressively. Though, it wasn’t aggressive enough to make for a big gain in deliveries. A record-breaker, yes, but not by all that much. Some analysts think that more price cuts are needed for Tesla to reach its delivery targets. In addition, the price cuts will continue to pressure industry profitability.
Overall, NIO stock is the biggest EV loser so far in today’s trading session, as it’s down 7.56% at the time of writing. Meanwhile, Tesla and Plug Power (NASDAQ:PLUG) are not far behind, with losses of 7.08% and 6.23%, respectively. Interestingly, though, Wall Street expects the most upside from PLUG stock, which has the potential to gain over 128%, according to the analyst consensus price target of $25.14.
