EV stocks are in focus as investors weigh Tesla deliveries, pricing war and OPEC actions
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The electric vehicle sector is on watch after a surprise OPEC output cut has some analysts forecasting +$100 per barrel crude oil prices for later in the year. A sustained level of high oil prices has generated more interest in the EV stocks in the past. Investors are also reacting to a flurry of delivery reports that have arrived over the last three days covering the Q1 or March reporting periods. Tesla reported Q1 deliveries of 422,875 vehicles and Rivian Automotive (RIVN) delivered 7,946 vehicles during the quarter. Chinese automaker Li Auto (LI), Nio (NIO), and XPeng (XPEV) all reported March deliveries rose on a year-over-year comparison.
A big theme in the EV sector is the impact of price cuts on margins. Notably, Morgan Stanley analyst Adam Jonas thinks Tesla (NASDAQ:TSLA) could cut prices again.
"Given the slowing economic environment, increased pressure on financial institutions willingness to lend, and competition (BYD and others), we believe Tesla and its EV competition may require further price cuts to achieve the higher end of consensus volume expectations this year. We are of the opinion that without the aggressive price cuts, Tesla sales may not have grown on a sequential basis, a sign that even the most dominant EV player is not invulnerable to a slowing macro and competition."
EV sectors showing gains in early trading on Monday included Microvast Holdings (MVST) +11.69%, REE Automotive (REE) +4.36%, Lightning eMotors (ZEV) +2.99%, and XPeng (XPEV) +2.55%.
Decliners on the day included Mullen Automotive (MULN) -10.13%, Micromobility.com (MCOM) -9.55%, Faraday Future Intelligent Electric (FFIE) -7.94%, Fisker (FSR) -4.15%, Lucid Group (LCID) -3.60%, and Nio (NIO) -3.58%.
As for Tesla (TSLA), shares were showing a 4.55% decline at 10:10 a.m. on Monday and slipped back below the $200 threshold. The Q1 deliveries tally was either a slight beat, a slight miss, or in-line depending upon which compilation of analyst estimates were used. However, Tesla was below the pace needed to hit the 50% annual deliveries growth target.
Seeking Alpha analyst Livy Investment Research has a detailed breakdown on how investors should view the Tesla deliveries report.