What happened

Shares of many stocks in the electric vehicle space opened lower on Monday, amid a broader sell-off of technology stocks on concerns about upcoming inflation data and the beginning of earnings season.

Here's where things stood for three companies' stocks as of 10:45 a.m. ET, relative to their closing prices on Friday:

  • Cenntro Electric Group (NAKD) was down about 10.3%.
  • Nikola (NKLA 2.58%) was down about 6.9%.
  • Nio (NIO 2.30%) was down about 4.9%.

So what

It's no secret that investors are worried about the potential for higher interest rates. Recent bond-market moves have made those worries clear: It's likely that the jump in the benchmark 10-year Treasury rate, from 1.769% on Friday to 1.8% on Monday, was the initial driver of Monday morning's tech sell-off. 

Rates have been rising on a growing consensus that the U.S. Federal Reserve could begin raising short-term interest rates in March -- and that it will likely begin reducing its holdings of bonds and other assets soon after. The Fed has been buying corporate bonds since the onset of the COVID-19 pandemic in early 2020 in an effort to support companies facing pandemic-related disruptions. 

Adding to the markets' acute concerns: The U.S. government will release consumer price and inflation data on Wednesday. If inflation continues to be high, it will be even more likely that the Fed will act on interest rates in March. 

That's the backdrop to today's moves. While none of these stocks appeared to be moving lower on company-specific news, here's the most recent news on each:

  • Cenntro's stock is likely still under post-merger pressure. The company is the result of a December merger between a small maker of electric commercial vehicles (Cenntro) and a struggling lingerie retailer (Naked Brand) that transformed itself into something like a special-purpose acquisition company (SPAC) last year. As with other SPACs in recent times, Naked's stock surged after it announced the deal to merge with Cenntro. As I said last week, I think now that the merger is complete, reality is setting in for investors who bought the hype. 
  • Nikola, which delivered its first four electric semis to a customer in December, continued its steady announcement of small deals last week. Most recently, Nikola said on Thursday that it had received a letter of intent from trucking company Saia to purchase or lease 100 of its battery-electric Tre semis. The deal is contingent on successful testing of three Tres in Saia's fleet; those tests will begin before the end of the second quarter. 
  • Nio got some praise from Wall Street on Monday morning. In a new note, HSBC analyst Yuqian Ding raised the bank's price target for Nio's shares slightly, to $54 from $53, while maintaining HSBC's previous buy rating on the stock. Noting that Nio's December deliveries were up 50% from a year ago, and that the company has three new models coming this year, Ding wrote that he expects Nio's rapid growth to continue over the medium term. 
A white Nikola Tre, an electric semi truck.

Nikola began deliveries of its Tre electric semi in December. Image source: Nikola.

Now what

Electric vehicle investors will be looking ahead to earnings, hoping that reassurance from these companies' management teams will help to overcome market fears around rising interest rates. As of now, none of the three has announced dates for their fourth-quarter reports, but based on past trends we can expect Nikola to report in late February and Nio to report in early March. As for Cenntro, we'll see.