Tesla, Rivian and Lucid headline double-digit rallies across EV sector
Adam Smigielski/E+ via Getty Images

Electric vehicle stocks broke higher on Tuesday to recover some of the ground recently lost amid recession fears and a valuation reset with higher interest rates firmly in the mix to alter discounted cash flow projections.
There was some positive EV news out of China, where Li Auto (NASDAQ:LI) introduced a new SUV model and Citi hiked price targets across the sector. Reports on the Chinese government planning to take extraordinary measures to boost profitability across the EV supply chain is also supporting some of the risk-on trading.
Some of the biggest gainers in the electric vehicle sector included pops for Mullen Automotive (MULN) +20.45%, Rivian Automotive (RIVN) +15.03%, Arrival (ARVL) +11.79%, Lucid Group (LCID) +11.25%, Canoo (GOEV) +11.00%, Nio (NIO) +10.15%, Li Auto (LI) +8.59%, and Faraday Future Intelligent Electric (FFIE) +8.25%.
Meanwhile, Tesla (TSLA) jumped 11.11% to erase two weeks of downward pressure. TSLA still trades well below the 50-day, 100-day, and 200-day moving averages.
Morgan Stanley weighed in on buying auto stocks with recession talk in the wind.
Analyst Adam Jonas: "The best alpha (maybe the only true alpha) generated in autos comes from buying stocks during economic downturns, typically when their earnings have been cut 50 to 100%, when they stop the buybacks, cut the dividends, and take other measures to preserve liquidity. Of course, this is harrowing stuff and hard to do in practice, but as early cyclicals, auto names tend to rally while numbers are still being revised down."
Read about Elon Musk's latest proclamations on the supply chain and chances for a U.S. recession.
Read about the newest electric vehicle stock which is due to start trading this week.