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Stocks for EVs Plunged Nearly 15% In September

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According to CNBC, September was a terrible month for a leading ETF for EVs and autonomous vehicles stocks. Additionally, the stocks of EVs and autonomous cars dropped nearly 15% amid fears that a recession may reduce automakers' income. Furthermore, the Global X Autonomous and Electric Vehicles ETF closed on Friday at roughly $20, more than 37% below the group's 52-week high. On a percentage basis, it was the group's second-worst performing month ever, trailing only March 2020, when the whole stock market experienced sharp falls. Moreover, investors are worried that the possibility of a recession won't deter the Federal Reserve Bank's intention to keep raising interest rates. And this might make new automobiles more expensive for individuals and businesses that need to finance the purchases. EVs share market graph Besides, customers already struggle with higher sticker prices than ever due to dealers' demands for higher premiums because of inventory shortages. According to J.D. Power figures, the average transaction price for a new car sold in August was $46,259—the highest price ever. Additionally, consumers are already starting to object to these high charges, according to TrueCar analyst Zack Krelle, especially as inflation raises their other bills and interest rates continue to climb. EVs In a statement on Thursday, Krelle said, "We see consumers faced with the reality that to afford the same vehicle at the same monthly payment as last year, they must increase their down payment, which is creating new affordability challenges. So, the increasing interest rates are testing affordability." More Details CNBC reported that automakers' profits would probably decline if the United States experienced a recession. Therefore, the stocks of major automakers like Ford Motor (down 27% in September), General Motors (down 18%), and Volkswagen (down 13%), all of which are holdings in the ETF, have been under pressure as a result. EVs Additionally, most of the ETF's portfolio's suppliers and startups in the EV and autonomous driving sectors are under pressure. In addition to limiting automakers' capacity to invest in new technology, rising interest rates and potential market deterioration would make it more difficult for those smaller businesses to acquire further funding from other investors. Moreover, most significant automakers are equipped to weather a downturn. However, many of the smaller businesses in the EV and self-driving industries would face difficulties. Some of the names that captured the investors' interest in recent years are still far from sustainable profitability and will require more financial injections in the coming years. But some companies, such as EV battery company QuantumScape (a component of the ETF, down 21% in September), might not even generate significant sales for several more quarters, let alone profitability. Other significant ETF movers in September included:
  • Lidar manufacturer, Luminar Technologies, saw a monthly decline of 13%.
  • Nio and XPeng, two Chinese producers of electric cars, saw their monthly sales decline by 20% and 34%, respectively.
  • Nikola, an electric heavy-truck maker, saw a 35% decline in September.

By Prelo Con

Following my passion by reviewing latest tech. Just love it.

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