Why US EV stocks fell on Tuesday

Tuesday was not an ideal day to be a shareholder in many of the electric vehicle (EV) and associated companies headquartered within US borders. Big news across the Pacific secured confidence in US producers, leading to a broad sell-off across the sector.

Manufacturer of trucks and SUVs Rivian Automotive (RIVN -6.95%)one, it saw a disheartening decline; closed the day 7% lower in price. Luxury EV specialist The Lucid Group (LCID -7.65%) did slightly worse with a decline of nearly 8%, while the developer of next-generation car batteries QuantumScape (QS -6.61%) lost just under 7% of its value.

Monstrous growth in shipments — outside the US

This news was actually great for a certain class of EV manufacturers; that class is the Chinese manufacturers. On the same day, several of the latter revealed their latest shipment numbers, and boy, were they so impressive.

He was in pole position Li Autowhich managed to increase both its September and Q3 numbers by well over 40% year-over-year. The largest manufacturer of electric vehicles, BYD saw a similar improvement, setting a new company record for the month of September with nearly 418,000 deliveries (representing an increase of about 46% from the same month in 2023). Significantly, this increase was largely due to a hot 86% increase in sales of hybrid vehicles, to about 253,000 in total.

This news comes ahead of the latest expected delivery figures from US electric vehicle manufacturers in particular adze; The EV standards setter is expected to release its numbers tomorrow. Analysts following the company correctly anticipate growth, but it likely won’t be comparable to those massive double-digit improvements from Asian rivals. The consensus is that Tesla will report 462,000 deliveries in the third quarter, representing year-over-year growth of “just” 6%.

Reverberations in this country

These excellent numbers, growth rates and new all-time highs from Chinese manufacturers are hurting sentiment toward their US peers in a number of ways.

First, these overall boffo growth rates — from already robust levels — illustrate that consumers in that market are much more willing to buy electric vehicles and hybrids than people on our shores. Second, China is a hotbed of electric vehicle demand, but American manufacturers may never be able to fully exploit it. Tesla is among the companies with a foothold there; however, it enjoys nowhere near the level of material support that the Chinese government gives its domestic manufacturers.

Finally, there is always the threat of successful companies from that country making inroads into that market. Their presence is quite limited so far here, and any push is sure to lead to backlash from government officials and the domestic industry. However, if the Chinese can deliver significant value and decent quality, they might just steal a march on our EV manufacturers.