Electric Vehicle Stocks Take a Beating Following Tesla’s Price Cut

Amid another soft session for Wall Street, electric vehicle stocks in particular printed dour results, a direct consequence of sector leader Tesla (TSLA) and its decision to cut prices for its popular EVs. Committed to sacrificing profitability for extracting maximum sales, the move sparks a war of attrition. That might leave only a few players standing once the dust settles, presenting concerns for investors with wide exposure to EV stocks.

According to a recent AP report, “[p]rice reductions across the model lineup cut into Tesla's first-quarter net income, causing it to fall 24% from a year ago.” Specifically, the EV manufacturer revealed that “it made $2.51 billion from January through March, down from $3.32 billion a year ago. Revenue rose 24% to $23.33 billion, but the company's operating profit margin fell.”