This year is expected to be a challenging one for the electric vehicle (EV) industry due to growing supply chain issues and rising production costs amid 40-year high inflation rates. Furthermore, because the Fed is set to raise interest rates this month, the borrowing costs for EV companies are expected to rise substantially, further raising the sector’s production costs.
Also, EV manufacturers are facing difficulties in sourcing sufficient semiconductors and supplies amid the global chip shortage. The bearish sentiment surrounding the electric vehicle industry is evidenced by the Global X Autonomous & Electric Vehicles ETF’s (DRIV) 13% decline year-to-date.
