The shortest horror story ever written can be told in one terrifying word.
Monday.
That may sound like a rather harsh way to describe the first day of the work week, but it's no stretch to say that Monday has very few fans- and they're probably all retired.
Electric vehicle stocks got a serious case of the Mondays on March 4, as shares of some of the biggest names in the sector pulled a screeching U-turn and went barreling down Red Ink Boulevard at gut-wrenching speed.
Arguably, a major factor for Monday's decline was the bad news from China, the world's largest electric vehicle market, which accounts for roughly 60% of EV sales worldwide.
More than half of the electric cars on roads worldwide are found in China, according to a report by the International Energy Association, so when the country's electric vehicle market sneezes, the rest of the EV world gets mighty green around the gills.
Tesla (TSLA) , for example, fell 7% on word the U.S. company shipped 60,365 vehicles from its China factory in February, according to data from the China Passenger Car Association. This was the lowest tally since December 2022 and down almost 16% month-on-month. Year-on-year, it was a wider 19% decrease.
But it wasn't just Tesla taking a drubbing. Shares of local EV makers like XPeng (XPEV) and Nio (NIO) were down around 8.3%. Li Auto (LAAOF) tumbled nearly 14%.
The EV price war rages on
BYD (BYDDY) , which dethroned Tesla in the fourth quarter as the top EV maker, was off about 1% on Monday afternoon.
February included an eight-day break in sales over the Lunar New Year holiday, but observers expressed concerns about the possibility of a price war.
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“Weak sales [in February] were expected, but a two-straight-month decline bodes ill for the Chinese electric car market where a new round of price cutting is taking shape,” Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai, told the South China Morning Post. “Escalating competition in a slowing market will kick some underachieving players out this year.”
Last week, Tesla rolled out new incentives- including insurance subsidies- to attract consumers in China. It was its latest offensive in a protracted price war with BYD
BYD returned fire on Monday by launching a new version of its best-selling car at a lower price than the final price of its discontinued predecessor, Reuters reported.
The company set a starting price for its new Yuan Plus crossover - known as the Atto 3 in overseas markets - at 119,800 yuan, or $16,644, BYD said in a Weibo post, 11.8% lower than the final sales price of the version it has replaced.
The news startled investors. U.S. pure play EV makers were feeling the pain on Monday were Lucid (LCID) , down 4%; Rivian (RIVN) , down 4%; and Canoo (GOEV) , which lost about 8%
Workhorse Group, Hyliion Holdings (HYLN) , and Fisker (FSR) also fell.
The EV sector has been struggling recently, with automakers reducing or scrubbing their expansion plans.
Ford takes a different route
Still, Kelley Blue Book noted that Americans bought 1.2 million EVs last year, more than most observers had predicted.
EV sales growth slowed slightly during the year, but EVs remain the fastest-growing car sales category.
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And Cox Automotive, Kelley Blue Book's parent company, sees further growth ahead in 2024.
“We still believe more sales will follow, with EV sales in the U.S. in 2024 topping the more than 1.1-million-unit record set in 2023 and accounting for more than 10% of total sales,” said Stephanie Valdez Streaty, director of strategic planning for Cox Automotive.
But while the EV-only crowd was starting the week on a sour note, Ford (F) was shifting into high gear, with EVs and hybrids playing a major role in the automaker's February sales results.
The company reported that unit sales rose 10.5% year-over-year to 174,192. SUV sales rose 24% in February, while truck sales were up 1.4%.
However, electric vehicle unit sales were 81% higher to 3.523, hybrid vehicle unit sales rose 32% to 12,045, and internal combustion engine (ICE) unit sales were up 7.5%.
Ford is looking to shift its focus to high-margin hybrid and gas-powered vehicles amid early signs of cooling demand for EVs.
The company cut prices for its Mach E and reduced production at its Michigan Rouge Electric Vehicle Center to one shift starting April 1.
"Hybrid vehicles continue to be a growth segment for Ford, and sales have grown at a faster rate than the overall U.S. industry for much of the last year," the company said.
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