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The Zacks Analyst Blog Highlights: Tesla, Nikola, Electrameccanica, Workhorse and NIO
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For Immediate Release
Chicago, IL – August 18, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Tesla, Inc. (TSLA - Free Report) , Nikola Corporation (NKLA - Free Report) , Electrameccanica Vehicles Corp. , Workhorse Group Inc. (WKHS - Free Report) and NIO Inc. (NIO - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Who's to Blame for the Selloff in EV Stocks?
Yesterday was a rough day for investors in the electric vehicle (EV) market, with various stocks closing in the red. While a couple of EV stocks were dragged down by company-specific news, the broader sell-off in the industry could be attributed to regulatory concerns, rising COVID-19 cases, shortage of microchips and geopolitical worries.
Tesla Down Amid NHTSA Probe
Shares of EV behemoth Tesla declined more than 4% yesterday amid the U.S. National Highway Traffic Safety Administration's (NHTSA) probe into the firm's Autopilot system. The NHTSA has opened a formal investigation to evaluate the extent to which Autopilot or related self-driving features have resulted in crashes.
The NHTSA report identified that Tesla EVs using Autopilot have caused 11 crashes in nine states since 2018. The series of crashes have left at least 17 injured and one dead.
The agency has notified that around 765,000 Tesla vehicles (including Model 3, Y, S and X) built between 2014 and 2021 could be impacted by a possible future recall. In addition to the scrutiny by the nation's top auto safety watchdog, investors are also weighing the impact of chip shortage and supply chain disruptions, which may act as a near-term obstacle to Tesla's production growth plans.
Other EV Pure-Plays Also Dip
Various other pure-play EV startups including Nikola, Electrameccanica, Workhorse, Canoo and Arcimoto slipped 4.2%, 5.5%, 0.8%, 2.7%, 6.4% and 0.7%, respectively, yesterday. Most of these companies dipped yesterday in the absence of any direct news. It seems that rising COVID cases, increasing supply chain issues and the underlying fundamental weakness of the stocks relative to their stretched valuations have put investors on edge.
After wreaking havoc across the globe for more than a year, the COVID-19 virus has resurfaced with its highly-contagious Delta variant. For the week ended Aug 14, this new strain accounted for 40% of hospitalizations in the United States, with Texas and Florida experiencing the worst outbreak in months. Surge in Delta variant cases is also dampening the enthusiasm in the labor market and worsening the shortage of semiconductor supply.
Like TSLA, NIO Also Tumbles on Regulatory Issues
NIO, dubbed as the "Tesla of China," closed the session 5.87% lower yesterday amid regulatory concerns, following the death of a noted entrepreneur Lin Wenquin in a NIO's ES8 SUV. The car's Navigate on Pilot hands-free driving system was active at the time of the crash.
This news comes on the heels of another fatal incident involving a NIO vehicle in China. These accidents are indeed calling for stringent safety regulations for smart and driverless cars in China. The need for heightened safety regulation has led to the sell-off of several other China-based EV stocks yesterday.
Expect More Volatility from China EV Stocks
The Asia-Pacific stocks slid yesterday amid Taliban tremors and weaker-than-expected economic data from China. The data revealed that retail sales, factory output and urban investment in China missed estimates amid a spike in Delta variant cases. China is dealing with the most widespread COVID-19 outbreak and has been forced to impose fresh lockdown measures. Rising coronavirus cases and fresh lockdown measures including closure of major ports are aggravating supply chain concerns.
With the Delta variant having the potential to slow down the China economy further and escalate shortage of battery components and microchips, investors are weighing the prospects of China EV stocks like NIO, XPeng, and Li Auto. While NIO and Li Auto carry a Zacks Rank #4 (Sell), XPeng is a Zacks Rank #3 (Hold) stock. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Considering the latest NIO accident, a regulatory crackdown on advanced self-driving technology will intensify, thereby impacting the China EV makers. Just last week, China doubled down on smart vehicles automated driving functions.
Per the newly proposed regulations by the Ministry of Industry and Information Technology, carmakers should enhance safety measures for their vehicles and rev up cybersecurity efforts to ward off system vulnerabilities as well as standardize software upgrades. While the up-and-coming EV companies can revolutionize the mobility landscape, overcoming the safety concerns related to autonomous driving will be a daunting task for them.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Tesla, Nikola, Electrameccanica, Workhorse and NIO
For Immediate Release
Chicago, IL – August 18, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Tesla, Inc. (TSLA - Free Report) , Nikola Corporation (NKLA - Free Report) , Electrameccanica Vehicles Corp. , Workhorse Group Inc. (WKHS - Free Report) and NIO Inc. (NIO - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Who's to Blame for the Selloff in EV Stocks?
Yesterday was a rough day for investors in the electric vehicle (EV) market, with various stocks closing in the red. While a couple of EV stocks were dragged down by company-specific news, the broader sell-off in the industry could be attributed to regulatory concerns, rising COVID-19 cases, shortage of microchips and geopolitical worries.
Tesla Down Amid NHTSA Probe
Shares of EV behemoth Tesla declined more than 4% yesterday amid the U.S. National Highway Traffic Safety Administration's (NHTSA) probe into the firm's Autopilot system. The NHTSA has opened a formal investigation to evaluate the extent to which Autopilot or related self-driving features have resulted in crashes.
The NHTSA report identified that Tesla EVs using Autopilot have caused 11 crashes in nine states since 2018. The series of crashes have left at least 17 injured and one dead.
The agency has notified that around 765,000 Tesla vehicles (including Model 3, Y, S and X) built between 2014 and 2021 could be impacted by a possible future recall. In addition to the scrutiny by the nation's top auto safety watchdog, investors are also weighing the impact of chip shortage and supply chain disruptions, which may act as a near-term obstacle to Tesla's production growth plans.
Other EV Pure-Plays Also Dip
Various other pure-play EV startups including Nikola, Electrameccanica, Workhorse, Canoo and Arcimoto slipped 4.2%, 5.5%, 0.8%, 2.7%, 6.4% and 0.7%, respectively, yesterday. Most of these companies dipped yesterday in the absence of any direct news. It seems that rising COVID cases, increasing supply chain issues and the underlying fundamental weakness of the stocks relative to their stretched valuations have put investors on edge.
After wreaking havoc across the globe for more than a year, the COVID-19 virus has resurfaced with its highly-contagious Delta variant. For the week ended Aug 14, this new strain accounted for 40% of hospitalizations in the United States, with Texas and Florida experiencing the worst outbreak in months. Surge in Delta variant cases is also dampening the enthusiasm in the labor market and worsening the shortage of semiconductor supply.
Like TSLA, NIO Also Tumbles on Regulatory Issues
NIO, dubbed as the "Tesla of China," closed the session 5.87% lower yesterday amid regulatory concerns, following the death of a noted entrepreneur Lin Wenquin in a NIO's ES8 SUV. The car's Navigate on Pilot hands-free driving system was active at the time of the crash.
This news comes on the heels of another fatal incident involving a NIO vehicle in China. These accidents are indeed calling for stringent safety regulations for smart and driverless cars in China. The need for heightened safety regulation has led to the sell-off of several other China-based EV stocks yesterday.
Expect More Volatility from China EV Stocks
The Asia-Pacific stocks slid yesterday amid Taliban tremors and weaker-than-expected economic data from China. The data revealed that retail sales, factory output and urban investment in China missed estimates amid a spike in Delta variant cases. China is dealing with the most widespread COVID-19 outbreak and has been forced to impose fresh lockdown measures. Rising coronavirus cases and fresh lockdown measures including closure of major ports are aggravating supply chain concerns.
With the Delta variant having the potential to slow down the China economy further and escalate shortage of battery components and microchips, investors are weighing the prospects of China EV stocks like NIO, XPeng, and Li Auto. While NIO and Li Auto carry a Zacks Rank #4 (Sell), XPeng is a Zacks Rank #3 (Hold) stock. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Considering the latest NIO accident, a regulatory crackdown on advanced self-driving technology will intensify, thereby impacting the China EV makers. Just last week, China doubled down on smart vehicles automated driving functions.
Per the newly proposed regulations by the Ministry of Industry and Information Technology, carmakers should enhance safety measures for their vehicles and rev up cybersecurity efforts to ward off system vulnerabilities as well as standardize software upgrades. While the up-and-coming EV companies can revolutionize the mobility landscape, overcoming the safety concerns related to autonomous driving will be a daunting task for them.
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Zacks Investment Research
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.