Here’s why some electric vehicle stocks are down as oil futures surge above $100

Shares of electric vehicle makers were mixed on Thursday, with some boosted by concerns over soaring oil futures, but shares of electric vehicle companies with closer ties to China languish in the red .

Shares of Tesla Inc. TSLA,
and US certificates of deposit from Chinese electric vehicle manufacturer Nio Inc. NIO,
fell 1% and 2%, with shares of General Motors Co. GM,
and Ford Motor Co.F,
who promised to add many more electric vehicles to their range, also in the red.

Shares of U.S.-focused electric vehicle makers were the rare patch of green on stock market screens today, with Rivian Automotive Inc. RIVN,
stock up almost 2% and shares of Fisker Inc. FSR,
jumping nearly 4%.

Sentiment around domestic-focused EV companies was further helped by Nikola Corp.’s NKLA,
better-than-expected quarterly results earlier Thursday, when the electric truck maker reported a lower fourth-quarter loss and said it plans to deliver up to 500 of its Tre commercial trucks this year.

The EV split comes as the US oil futures benchmark hit $100 and Brent futures, the global benchmark, broke above that mark to highs not seen since 2014, fueled supply and sanctions issues surrounding Russia’s invasion of Ukraine.

See also: Dow down 600 points, but stocks reduce losses caused by Russia’s invasion of Ukraine

Rising oil prices are generally positive for demand for electric vehicles, but markets were factoring in other considerations, said CFRA’s Garrett Nelson.

“Some investors believe that with Russia’s invasion of Ukraine, the likelihood of China intervening in Taiwan has increased,” he said.

This makes investors nervous about future sanctions “and the impact these could have on companies with significant operations in China such as Tesla and Nio.”

Additionally, Taiwan accounts for more than half of the world’s chip production, “so any change in the status quo could have a dramatic impact on chip supply at a time when automakers are already struggling with shortages.” , Nelson said.

ADRS from chipmaker Taiwan Semiconductor Manufacturing Co. Ltd. TSM,
fell more than 6% on Thursday, putting them on track for their lowest close since Aug. 20.

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